Loonie Surges on Unexpected Canadian Trade Balance Turnaround

The Canadian dollar gained strength after Canada reported its first current account surplus in four years. The $17 billion turnaround in the second quarter exceeded economists' forecasts, which predicted a $2 billion deficit.

Canada's current account balance swung to an $8.84 billion surplus from a deficit of $8.31 billion in the first quarter, driven by surging energy and goods exports.

The result came as Canada posted its fastest quarterly GDP growth since early 2023, with real GDP rising 3.3 percent annualized in the second quarter and June monthly GDP up 0.3 percent.

Analysts say the surplus reflects a commodity windfall that has largely been overlooked due to trade-war anxiety.