BOC’s Gravelle: The risk of a wave of consumer defaults seems low

Dhwani Mehta FXStreet

The Bank of Canada (BOC) Deputy Governor Toni Gravelle downplayed the risks of a consumer default wave, in remarks via video conference to the Autorite des marches financiers, adding that the impact of the coronavirus pandemic has not yet materialized.

Further comments (via Bloomberg)

“We have long warned that a recession could create broad stress across the financial system.”

“Yet, despite the devastating economic impact of the pandemic, this risk has not -- as of yet -- materialized.”

“To this point, we do not see signs that home prices are rising due to speculation like we saw in the greater Toronto and Vancouver areas a few years ago.”

Cautioned about “the need to be vigilant in certain segments of the market such as condos.”

“Staff will be conducting simulations using firm-level data to quantify this, and we plan to publish those results in the next couple of months.”

USD/CAD consolidates below 1.3100

USD/CAD showed little reaction on the above comments, as it keeps its consolidative mode intact around 1.3080 following Monday’s rally to two-day highs of 1.3113 on broad-based US dollar strength.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

EUR/USD climbs to daily highs near 1.1820

EUR/USD now picks up pace and advances to the area of daily peaks north of the 1.1800 barrier at the end of the week. The pair’s decent move higher comes against the backdrop of a generalised lack of direction in the FX galaxy and the mild offered stance in the US Dollar.

GBP/USD trims losses, retests 1.3460

After briefly challenging its key 200-day SMA near 1.3440, GBP/USD now manages to regain some balance and revisit the 1.3460 zone on Friday. Cable’s pullback comes as the selling pressure on the Greenback gathers traction, reigniting some recovery in the risk-linked space.

Gold flirts with four-week highs past $5,200

Gold extends its rebound, climbing for a third consecutive session and pushing back above the $5,200 mark per troy ounce on Friday. The move higher continues to draw support from lingering geopolitical tensions and the ongoing uncertainty surrounding US trade policy, both of which are keeping safe-haven demand firmly in play.

Bitcoin, Ethereum and Ripple consolidate with short-term cautious bullish bias

Bitcoin, Ethereum and Ripple are consolidating near key technical areas on Friday, showing mild signs of stabilization after recent volatility. BTC holds above $67,000 despite mild losses so far this week, while ETH hovers around $2,000 after a rejection near its upper consolidation boundary.

Changing the game: International implications of recent tariff developments

The Supreme Court ruling on International Emergency Economic Powers Act (IEEPA) tariffs provides limited relief for the rest of the world, with weighted average tariff rates modestly lower.

Starknet unveils strkBTC, shielded Bitcoin transactions on Ethereum Layer 2

Starknet, the Ethereum Layer 2 network developed by StarkWare, today announced strkBTC, a wrapped Bitcoin asset that introduces optional shielding while preserving full DeFi composability.