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Hardy: Loonie longs lament Liberal landslide

Following the landslide victory for the Liberal party in Canada, Saxo's John Hardy discusses what it means for the Canadian dollar (CAD) in both the short and long term. Initial reaction is a weaker currency, he notes, because the market sees the government as left-leaning. But that's too simplistic, warns Hardy.

Wednesday's Bank of Canada meeting will be important and other drivers include US Federal Reserve policy.

In the longer term, a Liberal victory could be seen as a positive, says John. He points to increased fiscal stimulus which could result in more infrastructure investment and economic growth. On the other hand, the Liberals desire to tackle climate change could hurt Canada's energy industry which in turn could hit the loonie.

So over the next one to two years, the Liberal government looks like a 'marginal negative' for the Canadian dollar, believes John.

02:27 minutes
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