Canada's 2.4% economic growth result for Q4 of 2014 released yesterday proved to be a pleasant surprise for economists, as it came in 0.4% higher than their forecasts. The increase in the last quarter came mainly from residential structures and non-farm inventories. To add to the positive outlook, GDP figures for Q3 2014 were revised upwards, from 2.8% to 3.2%.
This morning we are awaiting the Bank of Canada's Key Rate Decision. It would be surprising to see Governor Stephen Poloz pull another rabbit out of his hat and lower the key rate once again, as he shocked analysts last January when he dropped the rate from 1.0% to 0.75%. The main reason for this was the economic slowdown in Western Canada stemming from collapsing crude oil prices. Most analysts polled on Bloomberg this morning do not expect a key rate cut this morning.
Other economic indicators could cause the USD/CAD pairing to be volatile, specifically the ADP National Employment Report, the ISM Non-Manufacturing Composite Index and the Federal Reserve's Beige Book, all from the U.S. Have a great day.
- Range of the day: 1.2450 - 1.2600
Philippe Shebib