The main factor behind the Canadian dollar appreciation is likely the expectation of tomorrow's Bank of Canada statement accompanying the widely expected hike.

The Bank of Canada has talked about the risks to 2007 on the downside. We would see the Canadian dollar weakening.

With the commodity prices easing, especially oil and natural gas, the expectation is that the Canadian dollar would actually come down somewhat.

The business conditions survey is going to take center stage for Canada, maybe in particular because the Canadian dollar seems to be playing an important role in the Bank of Canada's thinking now.

Even with the Canadian dollar appreciating some 6 U.S. cents through the year, both exports and imports in 2005 surged to record high levels.

There were probably industrial prices that were helping support the Canadian dollar and also some of the data that we'll get at the end of the week could be on the strong side.