Canadian merchandise trade deficit likely to have widened in October

Canadian international trade data for the month of October is set to be released tomorrow. According to a TD Economics research report, the merchandise trade deficit is likely to have widened to CAD 1.1 billion on a rebound in import activity while lower energy prices will have been a drag on exports.

Imports have dropped for three straight months and will benefit from a rebound in transportation equipment, while non-energy exports should be underpinned by stronger auto production and a rebound in advance U.S. imports, although softer energy exports will likely counter any gains.

“This is largely due to wider WCS/WTI spreads, which imply that real exports should outperform the nominal figure, although shut-ins throughout the oil sands will weigh on real exports going forward”, added TD Economics.

At 19:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was highly bearish at -141.541, while the FxWirePro's Hourly Strength Index of US Dollar was highly bullish at 110.615. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex