BofA Sees Currency Risks Rising on Housing-Market Slowdowns
- Canada, Australia, New Zealand, Scandinavian FX most at risk
- Floating-rate loans may limit rate hikes by amplifying impacts
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A housing-market downturn may drag some of the world’s major currencies down with it.
Bank of America Corp. strategists led by Howard Du said in a note Wednesday that the run-up in real estate prices has increased debt levels in some countries and left many homeowners exposed to higher interest rates on floating-rate mortgages. The use of such loans is notable in Canada, New Zealand, Australia and Scandinavian countries.