The Canadian dollar weakened after the results of the Canadian Federal elections. Justin Trudeau’s Liberal party sealed a stunning victory in Monday’s Canadian general election, ousting Stephen Harper and his Conservatives.
The Liberals were projected to win 188 seats with 40 per cent of the popular vote, according to Elections Canada, the government election agency, giving it enough seats to form a majority government and defying pre-election polls that pointed to a slim minority win.
The Liberals plan to stimulate the economy with deficit spending. Trudeau campaigned on a plan that included running $25 billion ($19 billion U.S.) in deficits over three years to stimulate the economy with infrastructure spending, while increasing taxes on top earners and cutting them for the middle class.
The Canadian dollar weakened versus 12 of 16 major counterparts in the Asian trading session as CTV News projected a Liberal majority government. The loonie fell 0.2 percent to 77 U.S. cents at 11:25 p.m. in Toronto.
The benchmark 10-year government bond gained 12 cents to $107.12, pushing the security’s yield down one basis point to 1.46 percent.
“Investors are somewhat cautious about the change in government,” said Bipan Rai, director of foreign-exchange strategy at Canadian Imperial Bank of Commerce’s CIBC World Markets unit by phone from Toronto. “It might be due to some uncertainty about how the fiscal picture is going to look.”
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