Canadian Dollar Expected to Strengthen Amid Rising Calls for Trudeau's Resignation

Investing.com -- Canadian Prime Minister Justin Trudeau is facing increased calls for resignation from party members. This development comes ahead of a party meeting scheduled for later this week. Trudeau is expected to make a statement on Monday at 10:45 AM local time in the capital city of Ottawa.

Reports indicate that Trudeau, who has been in power for nearly a decade, has spent the holiday season contemplating his future. Some local news outlets suggest he may consider resigning before the party caucus gathers on Wednesday. However, Trudeau's spokespeople have yet to respond to requests for comments.

If Trudeau resigns, he would leave as one of Canada's least popular political figures, potentially leaving his party in a weakened state and the country facing an uncertain economic future. This uncertainty is heightened by incoming U.S. President Donald Trump's pledge to impose a 25% tariff on Canadian imports.

The Prime Minister's political standing has been shaken due to voter backlash against progressive policies, economic downturns, dissatisfaction with aggressive climate policies, and increasing resistance to immigration. Trudeau's authority was further destabilized last month when the New Democratic Party, which supports his minority government, announced it would withdraw its backing.

This announcement came shortly after Finance Minister Chrystia Freeland resigned due to disagreements with Trudeau over spending proposals. Freeland, who also served as Deputy Prime Minister, left the cabinet because she believed Trudeau had not taken enough precautions in preparation for a potential trade war with Washington.

As the Liberal Party's poll numbers decline, calls for Trudeau's resignation within the party have surged. The public holds Trudeau responsible for rising costs and housing shortages, a situation exacerbated by looser immigration policies.

Polls conducted in late 2024 and early this year reveal that Trudeau's approval rating has dropped to around 20%, with the Liberal Party trailing the Conservatives by more than 20 points.

Macquarie's Global FX and Rates Strategist Thierry Wizman stated, "With Trudeau's impending resignation, we are closer to a Conservative-led government taking office in Canada, and we can now say with over 50% certainty that by 2025 Canada will be governed by the Conservatives or a Conservative-led coalition."

"This awareness should help the CAD remain strong; USD/CAD may have already peaked — meaning, due to a better structural growth outlook post-election for Canada, it has arrived earlier than usual."

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