Canada posted a smaller-than-expected merchandise trade deficit of C$1.05 billion ($765 million) in April, as energy and gold helped exports grow faster than imports, data showed on Thursday.
Analysts polled by Reuters had forecast a C$1.40 billion
deficit in the month. The March deficit was downwardly revised to C$1.99
billion from C$2.28 billion reported initially.
Total exports rose 2.6% in April, while imports increased by
1.1%, Statistics Canada said. By volume, exports grew 1.7% and imports declined
by 0.2%.
The rise in exports was led by energy products and unwrought
gold.
The energy category benefited from higher natural gas, crude
oil and natural gas liquids exports, helping offset a decline in exports of
refined petroleum products and nuclear fuel, Statscan said. The increase in
unwrought gold exports was primarily attributable to higher prices.
The Canadian dollar was little changed after the numbers
were released with the loonie trading 0.04% weaker at 1.3697 to the U.S.
dollar, or 73 U.S. cents.
Exports to the United States, which is Canada's biggest
trading partner and accounts for over three quarters of exports, grew 2.4%,
helping to widen its trade surplus to its neighbor south of the border.
"We are seeing ... softening demand in the United
States which is certainly not an ideal backdrop for Canadian exporters to sell
into," said Stuart Bergman, chief economist at Export Development Canada.
Canada's economic growth is expected to have resumed in
April after stalling in March, helped by mining, quarrying, and oil and gas
extraction, Statscan said in preliminary GDP forecast released last week.
On Wednesday, the Bank of Canada lowered its key policy rate
for the first time in four years and said further cuts were possible if
inflation - last measured at 2.7% - continues to edge towards the bank's 2%
target.
Further cut in rates by the BoC will make it diverge from
the U.S. Federal Reserve more which could weaken the currency and could be good
for imports, Bergman said.
Import growth in April was led by cars, ships and unwrought
gold.
Motor vehicles and parts imports rose for the third
consecutive month, helped by imports of sport utility vehicles and other light
trucks from the United States.
Inbound delivery of ships, including a ferry from China that
will run between Newfoundland and Nova Scotia, also aided import numbers,
Statscan said.
Overall, 8 of the 11 export product categories rose in April, while 6 of the 11 import product recorded growth. Reuters