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CANADA ECONOMICS: Action Economics on Today's Trade Data

· 02/05/2021 04:20

09:09 AM EST, 02/05/2021 (MT Newswires) -- Action Economics has noted Canada's trade deficit narrowed to C$1.7 billion in December from minus C$3.6 billion in November (was minus C$3.3 bln). Exports improved 1.5%, led by a 10.2% jump in energy product exports. Imports fell 2.3%, driven lower by a -8.0% plunge in imports of consumer goods. AE noted Statistics Canada attributes the tumble in December to the change in the usual season pattern during 2020 amid the pandemic, which led to big "fluctuations in the seasonally adjusted data." Meanwhile, AE also noted, the report flags the exchange rate, which saw the loonie appreciate 1.6 cents against the greenback in December, leaving one of the largest monthly gains in three years. In U.S. dollars, exports jumped 3.6% and imports eased just -0.4%. AE said seasonals and exchange rate fluctuations make this report a challenge to interpret, but added the continued recovery in Canada's exports is "broadly encouraging for the second half recovery outlook."