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Housing market a threat to the Canadian dollar?

4:56 PM 9 June 2022

The Bank of Canada released its Financial System Review, which indicated possible problems with the real estate market. The bank signaled that for some Canadians who took out mortgages between 2021 and 2022, monthly payments could increase by nearly 45% between 2025 and 2026. Vulnerability to high land and property prices, interest rate hikes, and high household debt could increase the risk of a decline in GDP.

During a conference call with Governor Tiff Macklem, it was mentioned that Canada does not want to overly cool the economy and any decision on rate hikes will depend on inflation, which is currently a priority for the BoC. 

USDCAD pair, H4 interval. The loonie weakened due to today's reaction to the BoC report and overall dollar strength. Source: xStation 5

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