While most observers believe Ottawa is ready to trim $4 billion to $6 billion from the deficit, there is no direct evidence that deficit-cutting has any link to the value of the Canadian dollar.

"The danger in the deficit is that it makes the government very vulnerable to interest rates; the larger the deficit, the greater the potential that Ottawa might have to exact draconian tax increases or spending cuts to resolve a fiscal crisis," [Ted Carmichael] says.

Thus, even if no major budget-cutting or revenue-generating moves are enacted on Wednesday, Ottawa is looking at a deficit already about $3 billion to $4 billion lower than the past fiscal year.