The currency was off 0.01 of a cent at 101.44 cents US.
Polls suggested the pro-independence Parti Quebecois would return to office after nine years in opposition but it was far from certain whether the PQ would be able to form a majority government.
"The Quebec election poses a risk to (the Canadian dollar) given the potential for adverse reactions from investors, where higher yields on Quebec’s provincial debt could result from fears of a referendum in the event of a majority win for the Parti Quebecois," said Scotia Capital currency strategist Eric Theoret.
The central bank is widely expected to announce Wednesday that it is keeping its key rate unchanged at one per cent amid generally slowing economic conditions globally. But traders will look for hints as to when the bank might hike rates.
Commodity prices weakened while a disappointing reading of a key gauge of the manufacturing sector and lower construction spending raised expectations that the U.S. Federal Reserve will embark on another jolt of stimulus.
The Institute for Supply Management's August index came in at 49.6, a bit weaker than July's reading of 49.8 and below expectations of 50.2, which would signal expansion.
Also, construction spending dropped by 0.9 per cent in July against expectations for a slight increase.
The October crude contract on the New York Mercantile Exchange lost $1.17 to US$95.30 a barrel.
December copper was off early highs but still up one cent to US$3.47 a pound.
Gold bullion climbed $8.40 to US$1,696 an ounce.
Traders also looked ahead to Thursday and an announcement from European Central Bank president Mario Draghi. He is expected to announce details of a new bond-buying program intended to bring down the borrowing costs of countries such as Spain and Italy.
The plan is seen as a crucial step to easing the European government debt crisis, which is increasingly hurting the continent’s economy.
Ahead of Thursday’s announcement, Moody’s Investors Service lowered its rating outlook for the 17-country region that uses the euro currency, as uncertainty over the European debt crisis grows and the stronger countries in the group could be hard-pressed to provide support.
Moody’s is revising its outlook to “Negative” from “Stable” for the European Union’s top Aaa credit rating. That means the rating could be downgraded, which would cost the EU more to borrow.
Investors also looked to employment data for clues as to whether the U.S. Federal Reserve will deliver further stimulus. Economists expect the American economy created 127,000 jobs in August on top of 163,000 in July. The Fed holds its next meeting Sept. 13.
Canadian jobs data also comes out Friday. It is believed that the economy created about 11,000 jobs in August.
Meanwhile, there was some negative economic news over the long Labour Day weekend.
China's HSBC manufacturing Purchasing Managers Index fell to 47.6 in August from 49.3 in July, which was the lowest reading since March 2009.
However, there are signs that China’s central bank is resisting calls for more aggressive measures to boost the economy based on past experience — the huge stimulus enacted in response to the 2008 global crisis fuelled inflation and a wasteful spending boom.
Meanwhile, the final read on the Eurozone manufacturing PMI came in at 45.1 in August.