The ‘Loonie’ inched up on the US Dollar after the Canadian trade deficit narrowed by more-than-expected.
The Canadian Dollar Exchange Rate was in the region of 0.9704 against the US Dollar as of 14:40 pm GMT
After a raft of disappointing data there was finally some positive Canadian economic news today, as the nation’s trade deficit was shown to have narrowed in January.
According to Statistics Canada the nation’s global trade deficit dropped to 237 million Canadian Dollars, less than half than the 600 million deficit forecast by economists. December’s deficit was also revised by Statscan, falling from the initially reported 901 million to 332 million.
Commodities like crude oil and precious metal alloys were the main push behind exports rising to 39.1 billion Dollars, a 2.1 per cent gain and the most significant month-on-month increase for over two years.
Meanwhile, imports advanced 1.9 per cent, largely as a result of an increased volume of energy product related shipments.
Exports to the US, Canada’s largest trading partner, jumped by 2.6 per cent with imports similarly growing by 2.1 per cent. Canada’s trade surplus with the US increased from 4.03 billion Canadian Dollar’s in December to 4.25 billion in January.
After the trade report was released the Canadian Dollar posted modest gains against its American rival, recouping losses sustained yesterday and drifting above 97.08 US cents. The ‘Loonie’ also benefited as commodity prices rose and US unemployment claims fell to a six-week low.
After the news chief economist David Watt commented: ‘This is a bit of better news for the Canadian Dollar, after what the bank said yesterday. Canada also exported recorded volume in terms of barrels per day to the US in December, and there’s more production coming on line in the next few months.’
Yesterday the Bank of Canada held rates at their previous level, stating that it was the appropriate level for the foreseeable future.
Additional ‘Loonie’ movement can be expected tomorrow following the release of volatile Canadian housing starts, unemployment rate and employment change data.
Economists are forecasting the employment data to show an increase of 7,500 jobs in January.
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