🧐 ProPicks AI October update is out now! See which stocks made the listPick Stocks with AI

Loonie hits 1-week low as household debt burden climbs

Published 2019-09-13, 09:57 a/m
© Reuters.  Loonie hits 1-week low as household debt burden climbs
USD/CAD
-
CL
-
CA2YT=RR
-
CA10YT=RR
-
DXY
-

* Canadian dollar falls 0.2% against the greenback

* For the week, the loonie was on track to fall 0.5%

* Canada's household debt-to-income reaches a record 174.1% in Q2

* Canada's 10-year yield touches a six-week high at 1.490%

By Fergal Smith

TORONTO, Sept 13 (Reuters) - The Canadian dollar weakened to a one-week low against its U.S. counterpart on Friday as data showed a rising debt service burden for Canadians that could crimp their spending.

The ratio of Canadian household debt-to-income widened to a record 174.1% in the second quarter from a downwardly revised 172.8% in the first quarter, while the debt service ratio rose to 14.9%, data from Statistics Canada showed. means there's now a reduced share of disposable income left for households to spend on things other than debt servicing," Krishen Rangasamy, a senior economist at National Bank Financial, said in a note.

The Bank of Canada has worried that a pick-up in housing activity, due to lower mortgage rates in recent months, could add to the debt burden of Canadians.

The high debt loads and depleted savings of Canadians look set to crimp their spending for as long as decades, economists say. 9:22 a.m. (1322 GMT), the Canadian dollar CAD=D4 was trading 0.2% lower at 1.3233 to the greenback, or 75.57 U.S. cents. The currency touched its weakest intraday level since last Friday at 1.3242.

The decline for the loonie came as the greenback .DXY got a boost from data showing higher U.S. retail sales. the week, the loonie was on track to fall 0.5%, pressured by a drop in the price of oil, one of Canada's major exports.

Oil steadied on Friday after a three-day losing streak as hints of progress in the U.S.-China trade dispute balanced concerns about slowing global economies and oil demand. U.S. crude oil futures CLc1 were up 0.1% at $55.13 a barrel.

Canadian government bond prices were lower across the yield curve in sympathy with U.S. Treasuries. The two-year CA2YT=RR fell 3.5 Canadian cents to yield 1.625% and the 10-year CA10YT=RR was down 18 Canadian cents to yield 1.468%.

The 10-year yield touched its highest intraday level since Aug. 1 at 1.490%.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.