Given these divergent signals from the Bank of Canada and the Fed, look for the Canadian dollar to strengthen in the near term, trading decisively through 90 U.S. cents.

It is one of the hardest things to forecast. So, get used to it.

In addressing the matter of a speculative housing bubble, the more important question to answer is: are these robust economic fundamentals in Vancouver strong enough to support such price gains? Based on a number of indicators, we still don't think so.

Based on long-term factors, including demographics and income growth, the average annual increase in national home prices is likely to be around four per cent in the coming decade, so the recent high single- digit and low double-digit gains cannot persist indefinitely. But, the key issue is whether the adjustment to a more sustainable trend is gradual. The good news is that this is what appears to be happening in Central and Atlantic Canada.

We estimate that only Winnipeg and the Atlantic are more affordable than Calgary and Edmonton, but only because home prices in the former two are considerably cheaper than their Alberta counterparts.

The odds clearly favor the Bank of Canada raising the overnight rate by a quarter point on May 24 to 4.25 percent.