For the past few days, oil has come back to life rising from the lows of $47/bbl to above the key $50/bbl mark. The move has put some life into the loonie with USD/CAD falling nearly 200 points since the start of the week, but unless the crude rally extends further loonies gains are likely to end here.

Canada has been able to weather the decline in crude relatively well, but its economy remains mired in a low growth environment and the central bank remains unabashedly dovish. Tomorrow’s Canadian GDP is expected to match last month’s 0.3% rate. Overall, Canadian GDP is expanding at 1.9% rate and unless the data tomorrow surprises to the upside it’s unlikely to provide much of a boost to the loonie.

USD/CAD remains mired in a 1.3200-1.3400 range and is unlikely to break much beyond those barriers for the time being.