Canada Trade Surplus Widens Amid Weaker Loonie

Canada's merchandise trade surplus widened for the fourth consecutive month in June, with exports and imports both reaching record levels. Exports rose 0.4% to CAD 77.5B, while imports edged up 0.2% to CAD 73.6B, resulting in a modest widening of the trade surplus from CAD 3.7B to CAD 3.9B.

The record export values and wider trade surplus were partly due to the Canadian dollar's largest monthly decline against the US dollar since October 2022, which boosted headline trade values when converted into Canadian dollars. However, in US-dollar terms, exports and imports both declined around 2%, highlighting the currency's contribution to the record figures.

Export growth was supported by higher shipment volumes, with real exports increasing 1.1%. Canada's bilateral trade with the United States remained firm, although its surplus narrowed as imports from the US grew faster than exports. Trade outside the US showed improvement, driven by stronger gold shipments to the UK and weaker imports from China, South Korea, and Germany.