Canada’s trade deficit likely deteriorated in December on weak nominal energy exports and rebound in imports

Canada’s international trade data for the month of December is set to release tomorrow. According to a TD Economics data, further softness in nominal energy exports and a modest recovery in import activity might have led to the merchandise trade deficit to deteriorate to CAD 2.8 billion in the month.

Nominal energy exports is likely to have been dragged down by lower crude oil prices, suggesting a more modest fall in real exports, while non-energy exports might come in a bit higher than November on a rebound in manufacturing activity in the U.S.

“Our forecast assumes a modest rebound in import activity, which has fallen in six of the last eight months. However, the combination of soft US exports, fewer Boeing deliveries, and elevated inventories skew risks to the downside which would result in a smaller trade deficit”, added TD Economics.

At 19:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was highly bearish at -107.044, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at 45.1586 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex