Canadian dollar strengthens on wider trade surplus

The Canadian dollar strengthened on Tuesday, supported by a larger trade surplus. The currency settled at US$0.7029, or US$1=C$1.4226, up from Monday’s close of US$0.7016, or US$1=C$1.4254.

Canada’s merchandise trade surplus expanded to C$4.2 billion in August, up from C$787 million in July. Exports grew by 2.5%, while imports dropped by 2.0%, according to Statistics Canada. Exports to the U.S. surged to C$11.2 billion from C$6.1 billion ahead of new tariffs, while imports of U.S. goods fell by 2.5%.

Service exports rose by 0.7% to C$21.1 billion, while imports declined by 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 increased by 0.3% to US$89.74 per barrel. The TSX Composite Index also climbed, gaining 130.96 points to reach 35,649.51 points.