The Canadian dollar held near an 18-month low on Tuesday even after Canada's merchandise trade surplus widened to C$4.2 billion in August, its biggest in more than four years and well above the C$1.55 billion surplus economists polled by Reuters had expected. The loonie was last around C$1.4274 per U.S. dollar, with USD/CAD up about 0.09%, as broad U.S. dollar strength and concerns over the domestic economy continued to weigh on the currency. The improvement was driven in part by exporters accelerating shipments to the United States ahead of President Donald Trump's new 50% tariffs that took effect on Aug. 22, meaning September's figures are likely to provide a clearer picture of the tariffs' impact on Canadian trade. Exports to the United States jumped 8.1% in August while imports from the country fell 2.5%, pushing Canada's trade surplus with its largest trading partner to C$11.2 billion, a 19-month high, with the U.S. accounting for almost 70% of Canada's exports. Overall exports rose 2.5% to C$77.91 billion, led by a 4.7% increase in energy exports to C$19.03 billion, while imports fell 2% to C$73.71 billion, with motor vehicles and parts posting the largest decline.
USD/CAD holds near an 18-month high as broad USD strength and Trump's 50% tariffs on Canadian goods weigh on the loonie despite a record trade surplus.
