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Canada’s international trade deficit likely to have widened further in June

Canada’s international trade deficit likely to have widened further in June

OTTAWA: The Canadian international trade deficit is likely to have broadened further in June. According to a TD Economics research report, Canada’s international trade deficit is forecast to have widened to CAD 1.4 billion. The appreciation of the Canadian dollar after the Bank of Canada’s hawkish pivot is expected to result in softer exports and imports while another drop in energy prices would be a drag on the nominal print.

Crude oil prices dropped by about 6 percent in June; however, there is scope for export volumes to rise after a sharp rise in production in May. In the meantime, non-energy exports should see a more modest drop mainly because of a drag from weaker motor vehicle shipments. On the other side of the ledger, imports are expected to have dropped modestly to counter the pullback in export activity. Aircraft imports, which added to over half of the 2.4 percent rise last month, might see a minor pullback but should keep most of their strength on deliveries to Air Canada, noted TD Economics. At 22:00 GMT the FxWirePro’s Hourly Strength Index of Canadian Dollar was neutral at -15.209, while the FxWirePro’s Hourly Strength Index of US Dollar was neutral at -20.2258.