Ex­ports show strength amid US growth, low Cana­dian dol­lar

The Pak Banker - - 6BUSINESS -

TORONTO: Cana­dian ex­ports are fi­nally start­ing to show signs of a per­sis­tent re­cov­ery, with an­a­lysts cheered by healthy vol­umes in Jan­uary that rose sharply thanks to the weak do­mes­tic dol­lar and con­tin­ued U.S. growth.

Al­though Sta­tis­tics Canada said on Fri­day that the trade deficit had widened to $655-mil­lion from $631-mil­lion in De­cem­ber, mar­kets paid much more at­ten­tion to a 3.6 per cent jump in vol­ume. "The long-awaited ad­just­ment to the low dol­lar (and) firm U.S. con­sumer fi­nally ap­pears to be well un­der way, and the strong U.S. jobs data sug­gests it can con­tinue for some time yet," BMO Cap­i­tal Mar­kets Chief Econ­o­mist Doug Porter said in a note to clients.

An­a­lysts in a Reuters poll had pre­dicted a short­fall of $1.05bil­lion. Jan­uary marked the 17th con­sec­u­tive monthly trade deficit, re­flect­ing con­tin­u­ing eco­nomic dam­age caused by weak oil prices. The crude slump, though, has helped de­press the Cana­dian dol­lar and make ex­ports cheaper.

The Bank of Canada, whose next sched­uled in­ter­est rate an­nounce­ment is next Wed­nes­day, has been count­ing on non-oil ex­ports to help off­set the sharp pull­back in in­vest­ment in the en­ergy sec­tor caused by crude's slide. The value of ex­ports grew by 1.0 per cent over­all to a record $46.00-bil­lion even as prices fell by 2.5 per cent. When en­ergy prod­ucts were stripped out, the in­crease in the value of Jan­uary ex­ports was 2.3 per cent.

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