The Canadian dollar weakened against its U.S. counterpart on Tuesday as oil prices fell and despite data that showed Canada posting a fourth-straight month of trade surpluses.
The loonie was trading 0.2 per cent lower at 1.4070 per U.S. dollar, or 71.07 U.S. cents, after touching its weakest intraday level since last Wednesday at 1.4076.
Canada’s trade surplus hit a four-year high of $3.86-billion in June, when a weaker Canadian dollar helped inflate the value of exports and imports. Analysts had forecast a surplus of $3 -billion.
“June’s data confirm that a further rebound in export volumes from the lows seen in 2025 appears to have been a large driver of the strength in GDP signaled for Q2,” Andrew Grantham, senior economist at CIBC Capital Markets, said in a note. “However, with the threat of new tariffs looming, this surge in exports could easily slow or stall ahead.”
Preliminary data has pointed to Canada’s economy growing by 3.4 per cent in the second quarter on an annualized basis.
The U.S. announced new tariffs on nearly $20 billion worth of Canadian goods last month.
Separate data on Tuesday showed that Canada’s manufacturing sector expanded in July at the fastest pace in more than four years as rising domestic activity boosted production and new orders, but weak international demand raised doubt over the sustainability of the increase.
The price of oil, one of Canada’s major exports, fell 5.7 per cent to $75.80 a barrel after comments by Qatari and U.S. officials raised hopes for a diplomatic resolution to the Iran war that could improve oil flows through the Strait of Hormuz.
Canadian bond yields moved lower across the curve as the market reopened following Monday’s civic day holiday. The 10-year was down 10 basis points at 3.565 per cent, pulling back from a two-month high on Friday.
