Canada recorded a trade balance in the month of November 2016, the first surplus since September 2014. The country registered a surplus of CAD 526 million. Exports rose sharply by 4.3 percent in the month, whereas imports were rose a more modest 0.7 percent. In real terms volumes of export rose 3.5 percent, whereas that of imports dropped 0.3 percent, noted TD Economics in a research report.
The increases recorded in exports were broad based, driven by metal and non-metallic mineral products that reached the highest level in almost two years. The gains in exports were also driven by metal ores and non-metallic minerals, which rose 26 percent. Meanwhile, energy products helped drive the rise in imports. The rise in imports was slightly countered by 17 percent falls in aircraft and other transportation equipment imports.
Canada’s trade surplus with the U.S. broadened to CAD 4.2 billion in November, the greatest surplus since June 2015. In the meantime, the nation’s trade deficit with the remainder of the world dropped to CAD 3.7 billion, the smallest level in two years.
The rebound in the volumes of export in the month of November is a positive development for Canada’s economy, particularly given the weakness recorded in the prior two months. At present, volumes are at the highest level seen since February 2016, and might give some support to economic growth in the December quarter.
According to TD Economics, conditions appear to remain supportive for exports to take the growth baton in 2017, as the Canadian dollar is expected to continue to hover in the mid-70 US cent range and growth in the U.S. is likely to accelerate. However, protectionist measures that might emerge under the new U.S. President might restrict any growth in the sector.
“Canada’s external sector has struggled to gain traction, leaving the domestic economy as the key driver growth. As such, the Bank of Canada is unlikely to move off the sidelines anytime soon”, added TD Economics.
At 04:00 GMT the FxWirePro’s Hourly Strength Index of Canadian Dollar was highly bullish at 108.898, while the FxWirePro’s Hourly Strength Index of US Dollar was neutral at 27.5698. For more details on FxWirePro’s Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
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