The Canadian Dollar rose slightly against the Greenback, following the report on the country’s trade balance on Tuesday. The USD/CAD exchange rate declined 10 base points or 0.08% to 1.2250.
The Canadian trade deficit widened to C$3.2B over the month of December, as higher imports outpaced an increase in exports, missing expectations for a smaller deficit. Stephen Poloz, the Bank of Canada Governor, expressed concerns over the export sector, given the unclarity surrounding NAFTA. Trade is expected to subtract much more from the Q4 GDP, making the 2.5% growth target more difficult to reach. Poloz also noted that the Bank’s policymakers remain not only data-dependent, but alert to progress in NAFTA negotiations as well.
