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A strong Canadian GDP probably solidified that the Bank of Canada will hold rates on March 4. The commodity currencies were the top performers on Tuesday while the Swiss franc lagged. Australian GDP and China/Japan services data are due up next.  In today's Premium trades, we issued a new note with 3 charts on our existing 2 trades in USDCAD ahead of today's Canada GDP and Wednesday's BoC interest rate decision. Full detail found in the Premium Insights. A drop in oil prices did little to stifle the Canadian economy in the second half of 2014. The first reading on Q4 GDP showed a 2.4% increase compared to 2.0% expected. Q3 was also revised to 3.2% from 2.8% and combined it put annual growth slightly ahead of the US at 2.5% for 2014.

The loonie initially jumped 80 pips on the report but later gave up more than half the gains. In part because two-thirds of the quarterly growth was due to inventory building. A late, broad recovery in the US dollar was also a factor.