Canadian dollar strengthens as trade surplus widens in August

The Canadian dollar strengthened on Tuesday, supported by an expanding trade surplus. The currency closed at US$0.7029, or US$1=C$1.4226, up from Monday’s US$0.7016 (US$1=C$1.4254). Statistics Canada reported that the merchandise trade surplus grew to C$4.2 billion in August, a significant increase from C$787 million in July. This rise was driven by a 2.5% increase in exports and a 2.0% decline in imports.

Canadian exports to the U.S. surged to C$11.2 billion in August, nearly doubling from C$6.1 billion the previous month, likely ahead of new tariffs. Imports of U.S. goods fell by 2.5%. Additionally, service exports rose 0.7% to C$21.1 billion, while imports dropped 0.4% to C$20.7 billion, widening the trade surplus in services to C$400 million from C$200 million.

West Texas Intermediate crude oil prices climbed 0.3% to US$89.74 per barrel. Meanwhile, the TSX Composite Index gained 130.96 points, closing at 35,649.51 points.