Forex Flash: Carney appears to be leaving the BoC at the perfect time - BBH
FXstreet.com (Barcelona) - Brown Brothers Harriman analysts believe that yesterday's downgrade of 6 Canadian banks by Moody's was telling.
The ratings agency claimed that the high level of household indebtedness and elevated house prices left the bank especially vulnerable to downside risks of the Canadian economy.
They write, "Household debt/income ratios in Canada are estimated to be 165%, which is above US and UK levels at the peak. Going forward, investors will closely monitoring the downturn in Canadian housing, with prices slipping in H2 2012, sales and starts falling. The US dollar has appreciated almost 3% against the Canadian dollar since January 2011. The USD pull back that began yesterday saw some follow through, but new bids emerged ahead of CAD 1.0045."
The ratings agency claimed that the high level of household indebtedness and elevated house prices left the bank especially vulnerable to downside risks of the Canadian economy.
They write, "Household debt/income ratios in Canada are estimated to be 165%, which is above US and UK levels at the peak. Going forward, investors will closely monitoring the downturn in Canadian housing, with prices slipping in H2 2012, sales and starts falling. The US dollar has appreciated almost 3% against the Canadian dollar since January 2011. The USD pull back that began yesterday saw some follow through, but new bids emerged ahead of CAD 1.0045."
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