USD/CAD Canadian Dollar Lower on Record High Household Debt

Sep 13 18:09 2019 Print This Article

The Canadian dollar fell 0.45 percent on Friday and will finish 0.78 pecan lower against the US dollar. Canadian households have a 174.1 percent debt to income ratio in 2019 Q2. Rating agencies have already downgraded some of the banks as the risk of higher defaults rises as consumers take on more credit that they can pay back, even at record low interest rates.

The resurgence of the US dollar with a strong inflation data on Thursday and beating expectations in retail sales drove the greenback higher. A 25 basis points interest rate cut by the The U.S. Federal Reserve is still priced in, but with the strong indicators it can do the bare minimum. The biggest headwind to the US economy has been the US-China trade war, but details are emerging this week that have injected optimism as tariff exemptions and delays could be paving the way for a trade deal sooner rather than later.

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