Canadian dollar rallies as trade surplus widens more than expected
FXC•The Canadian dollar rose 0.3% to 1.4220 per U.S. dollar after Canada's August trade surplus widened to C$4.2 billion, above economists' C$1.55 billion forecast.
1. Currency and trade data
The Canadian dollar strengthened against its U.S. counterpart on Tuesday after data showed Canada's trade surplus widening more than expected and the U.S. dollar giving back some recent gains. The loonie traded 0.3% higher at 1.4220 per U.S. dollar, or 70.32 U.S. cents, after touching an 18-month low of 1.4293 on Monday.
2. Surplus exceeds forecast
Canada's trade surplus widened in August to C$4.2 billion ($2.94 billion), as exporters rushed to increase shipments to the United States before new tariffs took effect. Economists had expected the surplus to grow to C$1.55 billion from an upwardly revised C$787 million.
3. Other market factors
The U.S. dollar fell against a basket of major currencies as lower French government bond yields cooled concerns about euro zone debt markets and oil prices declined. Canadian government bond yields edged lower, with the 10-year yield down 2 basis points to 3.932%. September Canadian employment data, due Friday, could offer clues about the domestic economy; economists expect 9,200 jobs to be added and unemployment to rise to 6.5% from 6.4% in August.
