USDCAD hitting 1.41 by end of May on AI-driven productivity whispers?
Been watching $USDCAD bounce around, and with all the talk about AI-driven productivity gains starting to ripple through the US economy, I'm leaning towards a sustained push north. There's a decent chance the market starts pricing in even less dovish Fed action, or at least a wider divergence from the BoC. I'd put the probability of $USDCAD touching 1.41 before May is out at around 60%. Not quite the moon, but definitely a move from current 1.40197 levels. The CAD just isn't getting the love lately, and any sniff of US outperformance via tech is likely to amplify that divergence.
It’s not a done deal, mind you. A rogue CPI print or some unexpected BoC hawkishness could quickly turn things on their head, but the narrative seems to be building for USD strength, and AI developments are only fueling that fire. Anyone else seeing similar tea leaves, or am I just spending too much time in front of glowing screens?
Interesting take on the AI impact. While it's certainly a factor to consider for long-term US economic growth, I wonder if short-term CAD strength from oil or other commodity price shifts could offset some of that divergence in the near term, making 1.41 a tougher reach by May.