Loonie gains as Wall Street weighs in on Trudeau's resignation
The Canadian dollar advanced after Prime Minister Justin Trudeau announced his resignation as head of the Liberal Party, triggering a contest to replace him as leader.
The loonie rose as much as 1.2 per cent to $1.4280 Monday morning, aided by a weaker United States currency. Those gains softened later in the session as Trudeau addressed the media during a speech in Ottawa.
The Canadian dollar in December slid to its lowest level since March 2020 as Trudeau’s government fell into crisis after the shocking resignation of his finance minister. The loonie lost about six per cent in value in the last three months of 2024, dragged down by tariff threats from president-elect Donald Trump.
Here’s what investors and strategists are saying:
Valentin Marinov, head of G-10 FX strategy at Credit Agricole
“I doubt that Trudeau’s departure would be a game changer for the CAD even if it ultimately ushers in a period of relative political calm. This is partly because of the weak economic backdrop in Canada that has forced the BOC to become one of the most dovish G10 central banks in recent months.”
“While the ongoing political drama in Ottawa could trigger some interesting intraday moves in the CAD, the loonie may not yet be ready to spread its wings and fly.”
Thierry Wizman, global currencies and interest-rate strategist at Macquarie
“The bottom line is that with Trudeau’s pending resignation, it looks like a Conservative-led government is closer to being on the way in Canada, and we can now say with greater than 50% certitude that the Conservatives or a Conservative-led coalition will govern Canada in 2025. That realization should help the CAD stand up.”
Jayati Bharadwaj, currency strategist at TD Securities
“I don’t think the
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