Quebec separatists win election, but Canadian dollar barely moves

05 September 2012 13:52  [Source: ICIS news]

TORONTO (ICIS)--The separatist Parti Quebecois (PQ) has won the Quebec provincial election, ousting the previous Liberal government – but the Canadian dollar traded almost unchanged to the US dollar on Wednesday.

The PQ is committed to breaking Canada up, with Quebec seceding as a sovereign nation.

However, commentators said that while the PQ’s victory may add uncertainty for investors, it is unlikely that the new government under Pauline Marois will call for a referendum on Quebec's independence in the near future.

Although the PQ won and is set to form a minority government, opinion polls show that the majority of the electorate do not favour a referendum at this time. In 1995 the PQ nearly won a referendum on independence.

Liberal leader Jean Charest – a firm Canadian federalist – lost his seat in the provincial parliament, the Assemblee nationale du Quebec.

The Canadian dollar has been relatively strong in recent years, partly driven by high oil prices and the dollar's reputation as a safe haven.

However, Canadian chemical manufacturers and other export-dependent producers see the strong dollar as a competitive concern on export markets. The bulk of Canadian chemical production is exported, mainly to the US.

The Canadian dollar (C$) traded at C$1 = $1.01 on Wednesday morning, almost unchanged from Tuesday.

By: Stefan Baumgarten
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