USD/CAD started
the year at 1.37 and has risen to 1.42. I expect we round
trip. The USMCA negotiations are top of mind right now but the ‘ask’ side from
the US is manageable and I see plenty of signs of confidence on the Canadian side. There will be some token concessions but – after some brinksmanship – there
should be some clarity and a relief rally. If anything, the risks are all to
the CAD upside as there is a high likelihood of lower tariffs for steel, aluminum
and perhaps lumber.
On Monday
we got the Q2 business outlook survey from the Bank of Canada. In Q1, it showed solid business sentiment despite the headwinds on trade and the Iran war. Most importantly, the outlook for investment spending rose to the highest since 2024 and the second best levels since 2022.
BOC business outlook survey
I spoke with BNN about the outlook for the loonie but we also touched on some bigger trends in the world, including anti-immigration and the hidden drag that AI will have on the US dollar.
