How the U.S. Election Could Influence the Canadian Dollar and Your Investments

As the U.S. election draws closer, many investors are feeling the pressure of uncertainty. Karen Routledge, a Calgary investment adviser, has been fielding numerous calls from clients concerned about the potential impact of the election on their investments. From fears of tariffs to rising U.S. debt levels and interest rates, there is a wide range of issues causing anxiety among investors.

The looming election has sparked curiosity about how the outcome will affect the value of the loonie and what will happen if there are delays in determining the results. With so much at stake, Routledge emphasizes the importance of not letting politics dictate long-term investment strategies. She advises clients to see political noise as just that – noise – and not to make rash decisions based on short-term fluctuations.

The significance of the U.S. election extends far beyond American borders, as Canada is heavily reliant on its southern neighbor for trade. With billions of dollars worth of goods and services crossing the border daily, the outcome of the election could have far-reaching implications for both countries.

Experts predict that a Democratic victory, particularly with Kamala Harris as president, would likely maintain the status quo. However, a return of Donald Trump could spell trouble for international trade, as his administration was known for imposing widespread tariffs. The potential for a Republican sweep has economists warning of a “Trump slump” that could harm both the U.S. and global economies.

One of the major concerns for Canadian investors is the impact on the Canadian dollar. Already trading at low levels, the loonie could weaken further if uncertainty surrounding the election persists. The timing of the results is also a factor, as a contested outcome could lead to prolonged market instability.

Some market experts are hoping for political gridlock to prevent any extreme policies from being enacted. Despite fears of short-term volatility, investors are urged to focus on the long-term outlook. History has shown that markets can weather political uncertainty, and ultimately, the key is to stay focused on the bigger picture.

As the U.S. election approaches, it’s essential for investors to remain calm and stick to their long-term investment strategies. While the outcome may bring some short-term uncertainty, staying focused on the fundamentals of sound investing can help weather any storm.