The Canadian dollar strengthened from an almost eight-month low against its U.S. counterpart as the nation recorded the smallest merchandise trade deficit in almost a year in January on exports of crude oil and bitumen.
The currency extended gains as the number of Americans who filed for unemployment benefits lat week declined to a six-week low, showing further improvement in the labor market of Canada’s largest trade partner. The so-called loonie fell yesterday after the Bank of Canada left the benchmark interest rate unchanged and said the current level will “remain appropriate for a period of time.”
“This is a bit of better news for the Canadian dollar, after what the bank said yesterday,” David Watt, chief economist in Toronto at the Canadian unit of HSBC Holdings Plc, said by phone of the trade-deficit report. “Canada also exported recorded volume in terms of barrels per day to the U.S. in December, and there’s more production coming on line in the next few months.”
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