Macquarie highlighted the political unrest in Canada as a potential opportunity for investors, especially in the currency markets.
Following the resignation of Chrystia Freeland and other cabinet officials, Canadian Prime Minister Justin Trudeau is facing increasing pressure to resign, with calls for his resignation from his own Liberal Party.
MPs from Trudeau’s party have expressed concerns about a lack of unity and are calling for a change in leadership.
Amid these developments, there are reports that Trudeau is taking the possibility of resigning seriously and will announce his decision in a planned speech to Parliament on Monday before it begins recess on Tuesday.
This political turmoil has caught the attention of traders, who may be considering strategic long positions in the currency pair.
However, Macquarie advises caution, suggesting the potential emergence of a Conservative-led government could change the investment landscape.
According to the company, a conservative government in Canada would likely be pro-growth and align with the policies of the US Trump administration, potentially protecting Canada from US tariffs.
Macquarie speculates that the installation of a Conservative-led government could lead to a spike in the USD/CAD pair sooner than previously expected.
This scenario is based on the expectation that a growth-oriented Conservative government would strengthen the Canadian dollar against the US dollar, which would impact the dynamics of the foreign exchange market.
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