Canadian households continue amass higher levels of debt. At this point in the cycle, consumer leverage should have stabilized – particularly given tighter lending standards imposed by the government. However household credit outstanding as a fraction of disposable income hit another record last quarter.
Bloomberg: – “The household debt number shows you can’t expect the Canadian consumer to contribute much to Canadian growth, and reflects the troubles the Canadian economy still faces, which is not a positive for the currency,” said Adrian Miller, director of fixed-income strategies at GMP Securities LLC in New York. “Any strength in the Canadian dollar has to be discounted, as the bias is still to the downside as the U.S dollar gains strength with a better economic performance and expected tapering from the Fed.”