Canada’s GDP data reports yesterday reflected an economy that retains a lot of momentum. Q1 GDP was stronger than forecast (and well above BoC projections). Monthly data showed Mar activity holding up better than forecast, with early signs of a firm hand off to Apr. This should tilt risks more clearly towards our call that an additional 25 bps hike from the BoC is warranted. 

Firm economic data and the recent narrowing in US/Canada spreads should help curb CAD softness and give it a bit of a boost in the short run.