Canada sovereign rating downgraded
USD/CAD jumps after Fitch lowers Canada's rating to AA+ from AAA. The outlook is stable.
Canada is/was one of the few AAA-rated countries. Moody's and S&P still have top ratings.
Fitch said the downgrade reflects the deterioration of public finances resulting from the pandemic. They believe Canada will run much higher deficits and will emerge from the pandemic with higher debt ratios, including gross government general debt of 115.1% to GDP.
The stable outlook reflects an expectations that debt-to-GDP will stabilize over the medium term around 120% in 2022-24.
USD/CAD hit the highs of the day at 1.3617 on the headlines but hasn't followed through:
