Statistics Canada revealed that Canada's trade deficit shrank slightly to CAD $4.25 billion in January, the second highest on record, as low crude prices continued to devalue exports. Statscan revised December's deficit to CAD $4.82 billion from an initial CAD $4.59 billion. Upon the news, the Canadian dollar declined to CAD $1.34 to the U.S. dollar, or 74.48 U.S. cents.
Despite export growth of 2.9 percent to CAD $47.58 billion and the value of oil shipments increased by 36.5 percent due to higher prices, cruse exports remained 40.1 percent below the last increase in July 2018.
The Bank of Canada has put interest rate hikes on hold until data shows the economy recovering from a slump caused in part by low oil prices. Publication of the January data was delayed from March 7 due to a partial U.S. government shutdown.
Canada sent 71.5 percent of all its goods exports to the United States in January. Exports to the United States rose by 1.1 percent while imports edged up by 1.8 percent and as a result, the bilateral trade surplus shrank to $1.56 billion from $1.77 billion in December.