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Canadian Dollar Gets Boost from Trade Surplus, Crude Oil Prices

July 3, 2019 at 17:27 by Vladimir Vyun

LooniesThe Canadian dollar gained on its most-traded rivals today, gaining help from the positive domestic trade data, which showed an unexpected surplus, and rising prices for crude oil, Canada’s major export commodity.

Statistics Canada reported that the trade balance posted a C$762 million surplus in May, which followed the C$1.1 billion deficit in April. That was a total surprise to market participants, who were expecting the deficit to increase to C$1.7 billion. Gains were registered in both exports and imports.

Yesterday, the IHS Markit Canada Manufacturing Purchasing Managers’ Index was released, showing a reading of 49.2 in June, which was just marginally higher than the May’s figure of 49.1.

Futures for crude oil rose more than 1% today despite the report from the Energy Information Administration that showed a smaller-than-expected decrease of US inventories of crude. Apparently, the fact that the stockpiles were shrinking at all was enough for traders to be bullish on oil.

Statistics Canada will release employment data on Friday. Analysts predict that the report will show an increase of employment by 10,000 and a small rise of the unemployment rate from 5.4% to 5.5%.

USD/CAD dropped from 1.3106 to 1.3068 as of 17:25 GMT today. EUR/CAD slumped from 1.4787 to 1.4752, and its session low of 1.4733 was the lowest since October 2017. CAD/JPY rose from 82.29 to 82.50, rebounding from the daily minimum of 82.02.

If you have any questions, comments, or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

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