Update: CANADA ECONOMICS: StatsCan Says Exchange Rate Affects Trade Values in December
08:38 AM EST, 02/05/2021 (MT Newswires) -- In December, Statistics Canada said Friday, Canada's merchandise exports rose 1.5%, with energy product exports posting the largest increase. Imports fell 2.3%, mainly because of lower imports of consumer goods. As a result, StatsCan added, Canada's merchandise trade deficit with the world narrowed from $3.6 billion in November to $1.7 billion in December, the lowest deficit since June 2020.
For the year 2020, Canada's trade deficit totalled $36.2 billion, more than double the deficit observed in 2019. Total merchandise exports fell 12.3% in 2020, while imports were down 8.6%. By comparison, during the last major economic downturn, in 2009, annual merchandise exports dropped 24.6% and imports fell 15.7%.
According to StatsCan, a large proportion of import and export transactions are completed in US dollars and must be converted to Canadian dollars to compile monthly trade statistics. When the Canadian dollar appreciates against the US dollar, trade values in Canadian dollars are lower in the short term.
In December, StatsCan said, the average value of the Canadian dollar rose 1.6 cents US compared with the average value in November. This was one of the strongest increases in three years. When expressed in US dollars, Canadian exports rose 3.6% in December, and imports edged down 0.4%, it added.