Buoyed by rebounding oil prices, the CurrencyShares Canadian Dollar Trust (NYSE: FXC) has gained nearly 3% over the past two weeks, but some foreign currency traders remain cautious on the Canadian dollar ahead of elections in that country, slated for next week.

The Bank of Canada has been a reliable arm in guiding the Canadian economy, writes Luke Kawa for Bloomberg. For instance, the central bank was among the first to adopt a formal inflation target and has enjoyed success in achieving its targets. [Canada ETF Back on Track with Economy Recovering]

The country also enjoys large natural resource reserves. As we have witnessed, Canada’s oil production could either lift or weigh on the economy, depending on the energy market. Additionally, as we hear more about droughts and dry weather conditions, Canada’s freshwater reserves, which account for 20% of the world’s freshwater, could come into play.

Some observers have warned of a bubbling real estate sector, and traders have bet against Canadian real estate through shorting Canadian banks. In the meantime, the national median home price continues to climb to all-time highs. We will have to monitor how the government plans to engineer a soft landing for the real estate market in an attempt to mitigate a potential fallout. [Tepid Response by Canada ETFs to Surprise Rate Cut]

Currency traders are “paying more for options contracts that protect against currency swings expiring next week — the aftermath of Canada’s Oct. 19 vote — than for similar contracts that expire in a month, data compiled by Bloomberg show,” report Ari Altstedter andVincent Cignarella for Bloomberg.

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