DATA TO BE RELEASED: March 1 13:30GMT - December GDP, January industrial product price index and raw materials price index
The most important of these figures will the December GDP data, expected to grow 0.4% month-on-month after a similar rate in the previous month and on an annualised basis, economists forecast a rate of 4.0% in the fourth quarter to follow on from a reading of 0.4% in the third quarter, the point when Canada exited its recession.
Canada has seen three months of increased growth from September to November and the trend looks set to continue as exports lead the way. Analysts are also encouraged by the signs of investment in the housing market and a better performance from the retail sector. The growth prospects fall in line with those of the U.S. and both countries have interest rates at 0.25%.
EFFECT ON USD/CAD
The Canadian dollar has been locked inside a range of 1.0206-1.0869 since October 2009 and may stay in there unless a more hawkish stance is taken on interest rates (hence today's GDP data will be in focus) or a technical breakout is seen on the downside, since the price pattern resembles a bearish (for the U.S. currency) triangle formation. On the flip side, weak figures could see some short-covering in the usd/cad after the pair fell from 1.0780 to 1.0371 in February.
INTEREST RATE OUTLOOK
The Bank of Canada's next rate meeting falls on March 2 (Tuesday) at 14:00GMT and although recent data has been bullish for the economy, the central bank is most likely to keep to its earlier pledge to leave interest rates on hold until June this year, with most analysts expecting an interest hike sometime in the fourth quarter.
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