Ok, so most of North America is shut down today, family day in Ontario, and I'm not too sure what's the holiday in the U.S. But, what is interesting is the direction of oil prices -- not too sure what is driving them today, it is hard to believe that with Europe's economy is taters, China lowering interest rates (by 50 bps) because of the weakening housing market (although inflation is still sky high there), that the driver for higher oli price is a seemingly recovering U.S. economy... no, I suspect it is the neo-con (and evangelicals) trying real hard to start another war -- this one with Iran.
The most amazing commentary this weekend was that from a close confident of GW Bush (the young one) whose decision to invade Iraq was partly driven by a desire to see the apocalypse that woud eventually lead to the rapture (I wish I was joking), that and the ideal of finishing "dad's war" were the prime drivers -- despite what everyone say's in the GOP today there were no WMD in Iraq, the CIA didn't find any neither did MI6, Chenney, Bush and friends made it up.
So il prices are rising on the basis of rising tensions in the Middle East, specifically words of war with Iran, between the US or war between Iran and Israel, or war between Iran and Saudi Arabia... its hard to say who hates Iran more these days, the Americans, the Israel or the Saudis (granted they probably all hate them...). So Brent crude has been hovering around $121/bbl -- Feb average of $115/bbl Vs $111/bbl for January.
Canada, and the CAD in particular, is a petrol related economy, despite Q4 GDP weakness, and an estimated 2011 GDP growth of less than 2.1%, Canada's currency has been sitting at or above par with the USD, and is unlikely to move lower until oil prices do the same. In fact, odds are that the CAD will head back to its December high of 1.05/USD sooner rather than later. This has nothing to do with Canada economic health, but rather rising oil prices (granted these are good for Western Canada's economies).
For America the problem is the critical $4/gallon threshold that is very near, and that has in the past been a hugh economic signal. Like everything else, consumer eventually become desensitize to higher prices, once fuel is always around $3.5/gallon and then goes up a bit... still in the past this price rise has marked an economic slowdown.