Canadian PM Harper says his country will be out of its fiscal deficit in two years and that no tax hikes will be required. Canada has run fiscal surpluses for years and has dipped into deficit to fund stimulus spending t try and ward off the global recession, just like you read about in the textbooks.
The Loonie has been trading on a softer footing in recent days as the Loonie loses its link to commodity prices and focuses more on the economic woes of its southern neighbor and biggest customer, the US. We trade now at 1.1575, a bullish sign for dollar devotees who see a weak Loonie as a favorable leading indicator of dollar strength.