Oil and gold exports help Canada swing to surprise trade surplus in June

 Canada recorded a surprise trade surplus of C$638 million ($461 million) in June, as oil and gold helped exports overtake imports for the first time in four months, Statistics Canada data showed on Tuesday. Analysts polled by Reuters had forecast a C$1.84 billion trade deficit. May's trade deficit was revised to C$1.61 billion from a C$1.93 billion deficit reported initially.

Total exports jumped 5.5% in June, mainly due to crude oil and unwrought gold, while imports were up 1.9%, driven by cars and light trucks, data showed. By volume, exports rose 3.8% in June, while imports increased by 1.3%.

The Bank of Canada lowered its benchmark rate for a second straight month in July and indicated its focus was shifting to boosting the economy. Financial markets have fully priced in a 25 basis point cut in the central bank's key policy rate at its September meeting and another similar cut at its October meeting.

The bank expects growth to pick up in the second half of 2024, led by stronger exports and a recovery in household spending as borrowing costs ease. Canada's monthly GDP growth rate is expected to slow to 0.1% in June from 0.2% in May, data showed last week.

The Canadian dollar extended losses after the data with the loonie trading down 0.11% to 1.3838 to the U.S. dollar, or 72.26 U.S. cents. In June, energy exports rose 11.7%, helped by higher shipments as well as prices of crude oil, Statscan said.

The rise in crude oil exports was partly due to higher shipments to Asian countries, reflecting increased deliveries from the recently expanded Trans Mountain pipeline, the agency said.

But Kevin Nicholson, global fixed income chief investment officer at Riverfront Investment Group, said one underwhelming jobs report was hardly enough to justify Monday's widespread panic.

The rise in total imports was led by motor vehicles and parts as well as consumer goods. An 8.2% rise to a record C$6.8 billion in imports of passenger cars and light trucks drove the motor vehicles and parts category in June. The growth occurred amid a recovery from production disruptions and delayed deliveries in the United States in late 2023 and early 2024, Statscan said. Exports to the United States, by far Canada's largest trading partner, rose for a third consecutive month and outpaced the growth in imports in June, leading to Canada's trade surplus with its neighbor widening to the highest level since November 2023.  

Related Posts
Commnets
or

For faster login or register use your social account.

Connect with Facebook