Canada posts international trade deficit of C$1.4 billion in May

• Canada posted a surprise international trade deficit in May.
• USD/CAD trades in the negative territory below 1.2400.

Canada posted an international merchandise trade deficit of C$1.4 billion in May, the data published by Statistics Canada revealed on Friday. This reading came in worse than the market expectation for a surplus of C$0.37 billion.

"In May, Canada's merchandise imports increased 2.1%, while exports fell 1.6%," the publication read. "In May, the average value of the Canadian dollar increased 2.4 cents US compared with the average value in April to 82.5 cents US. This was the largest monthly increase since July 2017. When expressed in US dollars, Canadian imports were up 5.2% in May, and exports rose 1.4%."

Market reaction

The USD/CAD pair was last seen losing 0.33% on the day at 1.2392. However, this drop seems to be a product of the renewed USD weakness rather than CAD strength.