The Canadian dollar closed higher Wednesday as a much better-than-expected domestic trade report trumped geopolitical concerns.
The loonie ended up 0.39 of a cent at 91.63 cents (U.S.) as Statistics Canada reported that the country’s trade surplus shot up to $1.9-billion (Canadian) in June from a revised $576-million in May.
Economists had generally expected a $100-million trade deficit. The improvement came as exports rose 1.1 per cent to a record high of $45-billion in June, while imports declined 1.8 per cent.
Exports of energy products were up 2.5 per cent to $11.9-billion. Crude oil and crude bitumen increased 2.8 per cent to a record high of $8.9-billion, as prices rose 2.2 per cent.
Financial markets were generally focused on geopolitical worries after news reports emerged about a buildup of Russian troops on the Ukraine border. On Tuesday, Poland’s Prime Minister said he had information indicating that there was a growing threat of a “direct intervention” by Russia in Ukraine.
In addition, Russian President Vladimir Putin has told his government to prepare retaliatory measures against sanctions that have been levied by the U.S. and the EU for his country’s support of Ukrainian rebels.
There was also glum data out of Europe.
Italy’s gross domestic product contracted 0.2 per cent at an annual rate in the second quarter, which added to a negative showing in the first quarter, meaning the country is in technical recession.
And German industrial orders were 3.2 per cent lower than in May, when they also fell by 1.6 per cent.
The Federal Statistics Office said geopolitical developments and risks were a likely cause for the decrease in new orders and that they expected only moderate development in the coming months.
Nervous investors bought into the U.S. currency and sent gold prices higher.
The yield on the benchmark U.S. 10-year Treasury was 2.47 per cent late in the afternoon, down from 2.51 per cent late Tuesday.
December bullion was ahead $22.90 to $1,308.20 (U.S.) an ounce.
September copper fell 4 cents to $3.17 a pound while September crude dropped 46 cents to $96.92 a barrel.Report Typo/Error