Loonie up, current account deficit narrows, traders look to Canadian GDP figures

TORONTO – The Canadian dollar closed higher Thursday amid data showing an improvement in an important measure in foreign trade and ahead of the latest reading on the health of the Canadian economy.

The loonie was up 0.33 of a cent to 92.28 cents US as Statistics Canada said the country’s current account deficit narrowed by $3.3 billion to $12.4 billion in the first quarter on a seasonally adjusted basis. The agency said the increase was led by an improved trade in goods balance, which recorded its first surplus in more than two years.

Meanwhile, Statistics Canada will releases gross domestic product data for March and the first quarter on Friday. Economists are looking for an annualized rise of 1.7 per cent for the quarter and 0.1 per cent for the month.

That data is of particular concern, coming out days before the Bank of Canada releases its next interest rate announcement.

Traders also considered data showing a contraction in the American economy in the first quarter.

The first revision to first-quarter gross domestic product showed that GDP actually shrank at an annualized rate of one per cent in the period, largely because of severe winter weather.

That was much higher than the 0.5 per cent drop that economists had expected, but they anticipate the weakness to be short-lived.

On the commodity markets, July crude oil gained 86 cents to US$103.58 a barrel.

August gold bullion lost $2.60 to US$1,257.10 an ounce and July copper slipped three cents to US$3.14 a pound.