Skip to content
Subscriber Only

Loonie 6-Month Lead at Risk as First G-7 Rate Gain Looms

The Canadian dollar’s reign as the best-performing major currency over the past six months is in jeopardy as rising consumer debt loads collide with plans by Bank of Canada Governor Mark Carney to increase interest rates.

While international investors typically favor currencies with high rates for the potential for greater returns, traders are signaling that in Canada it would do little more than damage an economy underpinned by debt. Household borrowing was 152.9 percent of disposable income at the end of last year, climbing from about 135 percent in 2007 and exceeding the U.S.’s 145 percent, according to data compiled by Bloomberg.