As we enter the holiday shortened week, USD to CAD continues to hover around the 1.260 level, consistent with our short-term consensus forecast. Canadian GDP figures for January will be released on Wednesday but given the volatility of those numbers in the recent past, it is unlikely that any one month will move the exchange rate significantly. Instead, we think the focus will continue to be on messaging from the Bank of Canada and the Federal Reserve in the US. There are a number of speeches by Fed members over the week which could provide direction for the US dollar, but again, it is hard to imagine that the exchange rate will be anything but rangebound for the rest of the week. Equities are starting the week slightly weaker but that comes only after they hit record levels on Friday. Oil is also lower but it has stabilized above the 60 USD level and is not having much of an impact on the Canadian dollar today.
