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Canadian Trade Balance Posts an Unexpected Trade Surplus

CAD - Canadian Dollar

Canadian Trade Balance figures unexpectedly tilted into a surplus on more exports going to the United States in May. The surplus in trade is showing signs of renewed strength for the Canadian economy. Statistics Canada recorded an export increase in nine of eleven sectors they track; the Canadian economy had a trade surplus of $762 million in May driven by the rise in exports of 4.6%. The loonie found immediate support at 1.3071 (0.7650) testing this support even on the heels of falling WTI crude prices. WTI crude tested 56.50 overnight and is currently finding resistance at 57.00 dollars per barrel. Canadian dollar participants now look to the employment figures reported on Friday alongside the unemployment rate; the previous readings showed 27.7K and 5.4% respectively.

Key Movers

The Great British Pound was the other primary moving currency, falling 0.3% to open this morning at 1.2597. The Sterling was sent lower after the Bank of England’s Governor Carney released a downbeat economic outlook in a recent speech, citing several downside risks to the UK and global growth. Notably, he suggested that trade tensions had the potential to “shipwreck the global economy,” which some consider being an escalation in his language. As a result of the speech, the market is now pricing in a more than 50% chance the Bank of England will cut rates in November.

Expected Ranges

USD/CAD: 1.3063 - 1.3119 ▼

EUR/CAD: 1.4743 - 1.4803 ▼

GBP/CAD: 1.6424 - 1.6511 ▼

AUD/CAD: 0.9152 - 0.9200 ▲

NZD/CAD: 0.8742 - 0.8771

EUR/USD: 1.1268 - 1.1300 ▲