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Canada has been displaying excellent strength relative to the rest of the world over the last two years. The country's markets are up more than 140% since the bottom in March 2009. With GDP growth of 3.1% in 2010, Canada's economy is humming along.

The Canadian dollar closed yesterday at U.S. $1.03, its highest level since Nov. 14, 2007. Over the last few decades, the Canadian dollar has been at par or above the U.S. currency for only a scant few months. Much of that time it has traded in the $0.80-per-U.S.-dollar range.

With data indicating that Canada's economy grew faster than expected in December, it's likely that the Bank of Canada's interest-rate meeting and announcement (set for today) will be closely watched. Though the bank is expected to leave rates where they are until the second half of the year, the latest GDP figures could pressure the institution to make increases sooner rather than later.

A key factor for the strong Canadian economy has been increasing commodity prices. By total area (including its waters), Canada is the second-largest country in the world -- after Russia. Canada is an energy and commodity super power. Combine its vast size with its small population (only 34 million people) and you have a density of only 8.5 people per square mile -- among the lowest in the world.

The mix of abundant resources and a small population grants Canada the comfort of knowing it will most likely never run out of whatever commodities it may need. This allows the country to be a net exporter of a wealth of materials. Canada is the U.S.'s largest trading partner as we import more oil from our neighbor to the north than any other country in the world.

In addition, the banking system in Canada is considered to be one of the most efficient and safest in the world. There are five large banks in Canada and a few second-tier players as well. According to a 2008 World Economic Forum Global Competitiveness Report, Canada has the best banking system in the world.

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