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Rannella Billy-Ochieng’, economist at the Royal Bank of Canada, notes that Canadian trade deficit narrowed to $1B in August up from a revised $1.4B deficit in July.

Key Quotes

“The details of today’s report were arguably softer than the headline numbers implied. Non-energy export volumes increased about 1% month-over-month by our count, but driven largely from an increase in exports of aircraft and other transportation equipment which grew by 13.2%. That increase is likely not to be repeated in the coming months.”

“After accounting for price effects, energy exports were also down 2.2% in August. Despite the fact that imports volumes were up”” much of which was driven from gold, a pullback in equipment imports does not bode well for near-term business investment growth.”

“The notoriously volatile nature of the data makes us hesitant to put too much emphasis on one month’s reading. But the details of today’s trade report were a bit disappointing.”