Canadian Dollar Strengthens on Expanded Trade Surplus

The Canadian dollar strengthened on Tuesday, supported by an expanding trade surplus. The loonie settled at US$0.7029, or US$1=C$1.4226, marking an improvement from Monday’s close of US$0.7016 or US$1=C$1.4254.

Canada’s merchandise trade surplus grew to C$4.2 billion in August, up from C$787 million in July. This shift was driven by a 2.5% rise in exports and a 2.0% decline in imports, according to Statistics Canada.

Exports to the U.S. surged to C$11.2 billion, more than doubling from C$6.1 billion, likely ahead of new tariffs. Meanwhile, Canadian imports of U.S. goods fell by 2.5%. Service exports also increased by 0.7% to C$21.1 billion, while imports dropped 0.4%, widening the services surplus to C$400 million.

Commodity markets saw West Texas Intermediate crude oil rise 0.3% to US$89.74 per barrel. The TSX Composite Index climbed 130.96 points, closing at 35,649.51.