Canada: Trade deficit expands to $3.19 billion in June

• Canada's trade deficit widened more than expected in June.
• USD/CAD pair continues to trade deep in the negative territory around 1.3250.

Canada's trade deficit expanded from $1.33 billion in May to $3.19 billion in June, the monthly data published by Statistics Canada showed on Wednesday. This reading came in better than the market expectation for a deficit of 0.9 billion.

Key takeaways from the press release

"In June, Canadian merchandise imports and exports rebounded sharply, mostly on the strength of motor vehicles and parts."

"Imports rose 21.8% and exports were up 17.1%."

"However, compared with February 2020, the month before the pandemic's economic impact was felt in Canada, imports were down 14.3% and exports decreased 17.9%."

"In real (or volume) terms, imports were up 28.3% in June, while real exports increased 10.6%. Import prices were down 5.1%, while export prices rose 5.9%."

Market reaction

The USD/CAD pair recovered modestly from lows on this data and was last seen trading at 1.3252, still losing 0.5% on a daily basis.