Economic data versus oil
Canadian economic data is sizzling hot. The economic surprise indexes from Citi show how well economic data has performed relative to expectations.
The index for Canada is the highest it's been since 2010 and the highest in the world. Yet if you look at the Canadian dollar, it's been struggling.
A big reason is oil. Economic data is dated and oil are live. WTI is down 12% since the start of the month. That's a big hit to Canada's terms of trade.
The other issue is the central bank. Despite months of strong economic data, the Bank of Canada has been pessimistic. They retain a dovish bias and have downplayed good news.
Tomorrow, BOC Governor Stephen Poloz could change that. He's delivering a speech and holding a press conference. If he acknowledges some upside risks to the economy, then the Canadian dollar could take off.