The Canadian Dollar appreciated against the US Dollar due to a trade surplus of CAD 708 million in December and rising exports led by energy. However, the annual trade deficit grew to CAD 7.2 billion as imports exceeded exports. Dependence on U.S. trade adds complexity to this scenario. While January's S&P Global Services PMI suggests a contraction, developments like the unexpected drop in the U.S. ISM Services PMI may favor the Canadian dollar, although forthcoming U.S. job reports could reverse gains.
The Canadian Dollar has gained against the US Dollar due to a trade surplus and global market conditions, despite an overall widening trade deficit.
Key trading relationships and external developments in the U.S. will heavily influence the Canadian Dollar's performance moving forward.
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