FXStreet reports that economists at MUFG Bank believe the CAD's recent sell-off looks overdone in the near term.

“In contrast to more marked weakness in the Canadian dollar recently, the price of oil is continuing to hold up better. The resilience of the price of oil is suggesting that Canadian dollar weakness is overdone in the near-term.”

“Prime Minister Justin Trudeau is poised to win a third term following yesterday’s snap election although his Liberal party is set to fall short of winning a majority. Even with another minority government, the early results suggest that the Liberals will have a stable government most likely backed by the left-leaning New Democratic Party. It would allow Prime Minister Trudeau to continue running loose fiscal policy to support the economic recovery.” 

“The additional short-term spending is expected to provide more support for growth next year, and should encourage the BoC to continue tightening monetary policy as they remain on track to begin raising rates during the second half of next year.”