The Canadian dollar remained above 1.38 per US dollar, retreating slightly from the two-month peak of 1.38 achieved on December 5, as investors assessed the recent decisions and guidance from the Bank of Canada. In December, the Bank of Canada maintained its interest rate at 2.25%, emphasizing that its current policy stance is largely appropriate, given the reduction in economic slack following unexpected growth and labour market improvements. The third quarter saw an unexpected boost in GDP, with an annualized growth rate of 2.6%, while the labour market experienced notable job gains, pushing the unemployment rate down to approximately 6.5%. These developments decrease the likelihood of any immediate easing and suggest a potential future tightening if inflation remains persistent. Conversely, oil prices, a crucial export for Canada, have decreased from their early-December highs, which removes a significant terms-of-trade advantage for the Canadian dollar. The Bank of Canada also noted that the recent GDP growth was largely due to volatile trade factors, indicating that growth in the fourth quarter might be slower and casting doubt on the sustainability of the domestic economic upswing.