In Canada's early elections for the lower house of Parliament, the Liberal Party emerged victorious. According to the latest data, the ruling party secured 43.5% of the vote, while the Conservatives garnered 41%.

The vote count is not yet complete, and the victory is largely symbolic—it is still too early to say whether Carney's party will secure an absolute majority. The situation may still change, but the Liberals will most likely have to seek coalition partners to form a government.

Nevertheless, the fact remains: the Liberal Party will stay in power amid growing anti-Trump sentiment in Canada. Just a few months ago, the Liberals' ratings were at rock bottom — Canadians were deeply disappointed with Justin Trudeau's policies. Ironically, Donald Trump "came to the rescue" of the Liberal Party, effectively uniting and mobilizing Canadians against him. Carney focused his campaign on opposing Trump, turning the Liberals from underdogs into frontrunners. Preliminary voting results indicate that this anti-Trump strategy paid off — Carney secured at least 168 seats in the 343-seat House of Commons.

Carney is a well-known figure among forex traders. He spent over 10 years working at various Goldman Sachs divisions (in Toronto, New York, London, and Tokyo). In 2008, he became Governor of the Bank of Canada, and from 2013 to 2020, he led the Bank of England. During the election campaign, he actively criticized the U.S. president and pledged to expand Canada's network of trading partners to reduce reliance on the United States.

The Canadian dollar reacted tepidly to the preliminary election results. The USD/CAD pair rose by several dozen pips but remained within the 1.38 range. Buyers pushed the intraday high to 1.3870, after which the upward momentum faded, and the pair drifted sideways within a narrow range.

The election results failed to impress traders because the market had already anticipated that Carney would remain in charge. Polls had been showing growing support for the Liberal Party. In a way, overly "optimistic" polling forecasts hurt the Canadian dollar: inflated expectations were not met, and since the Liberals failed to secure an absolute majority, they will now have to negotiate with smaller parties to form a government. Notably, the Conservatives performed even better than in the previous election, securing 144 seats compared to 120 previously.

Nevertheless, there is little doubt that the Liberal Party will form a coalition and that Mark Carney will lead the Canadian government. The Liberals' underwhelming victory disappointed USD/CAD sellers, but the loonie remained within its familiar price range. The Canadian dollar has been trading within the 1.3800–1.3900 corridor for the third consecutive week, so today's price fluctuations are consistent with the broader trend.

Looking at the weekly USD/CAD chart, strong volatility was observed at the end of March and early April amid general U.S. dollar weakness. The pair fell nearly 600 pips in response to Trump's new tariff policies. However, since then, price volatility has sharply decreased. Over the past three weeks, the loonie has circled within the 1.3800–1.3900 range. Buyers occasionally attempt to break above 1.3900, while sellers try to push below 1.3800, but the pair always reverts to familiar levels.

In other words, traders are in a "waiting mode," anticipating the upcoming negotiations between Ottawa and Washington, which are expected to occur soon. Today, Carney stated that his first priority will be to discuss the future of bilateral relations with U.S. President Donald Trump. Last week, Trump again reiterated threats to Canada's sovereignty, claiming the country "would simply cease to exist" if the United States stopped buying Canadian goods. U.S. Secretary of State Marco Rubio (the third-highest ranking official in the U.S. executive branch) supported this view, saying, "Canada would be better off as part of the U.S."

Now that Carney has received his mandate, events will either escalate further or move toward de-escalation — if the two sides can find common ground despite the aggressive rhetoric from top American officials.

During the campaign, Carney and his main rival — Conservative Pierre Poilievre — promised to revisit the U.S.–Canada–Mexico Agreement (USMCA), which covers over 70% of Canada's exports. However, campaign rhetoric is one thing; actual actions are another. In his first public statement, Carney said he plans to meet with Donald Trump "as soon as possible" to discuss future economic relations between the two countries. Whether these talks will be successful remains an open question. Carney's predecessor, Justin Trudeau, visited Trump's Mar-a-Lago residence several times, boasting afterward about "successful and encouraging" dialogues — only for Trump to impose additional tariffs on Canadian goods and effectively declare Canada the "51st U.S. state."

In summary:

• The results of Canada's early parliamentary elections did not impress USD/CAD traders — neither buyers nor sellers. The Liberals' victory was expected, though it proved less convincing than forecasted.
• Market participants are now waiting for the upcoming Trump-Carney negotiations.
• Until then, the USD/CAD pair will likely continue trading within the 1.3800–1.3900 range, bouncing between the borders.