TORONTO - The Canadian dollar closed at a one month high Tuesday while the latest trade data showed a much smaller than expected surplus for March. But there was a sharp revision upwards for the trade surplus racked up in the previous month.
The loonie was up 0.61 of a cent to 91.92 cents US as Statistics Canada said the surplus came in at $79 million, much smaller than the $450 million that economists had expected and down sharply from the revised surplus of $847 million from February. The February trade surplus was originally reckoned to have come in at $290 million.
Exports declined 1.4 per cent to $42.7 billion, with prices down two per cent. Energy products were the main contributor to the overall decline in exports.
The other major Canadian economic report for the week comes out Friday when Statistics Canada posts the latest reading on employment.
Economists believe the Canadian economy created about 16,000 jobs in April, down from 43,000 in March. But job creation has been volatile and has regularly missed expectations.
The dollar gained ground amid a forecast that sees slower global economic growth.
The Organization for Economic Co-operation and Development said the global economy will grow by 3.4 per cent this year, down from its forecast of 3.6 per cent growth last November.
The OECD, a think-tank for the worldâ€™s most developed countries, cut Chinaâ€™s growth forecast this year to 7.4 per cent from 8.2 per cent in November. Meanwhile, the U.S. economy is forecast to grow 2.6 per cent this year against last Novemberâ€™s 2.9 per cent estimate.
The news is better for Canada: economic growth is projected to accelerate to 2.75 per cent by 2015.
The OECD warned that "financial tensions in emerging markets are one risk that could blow the global recovery off course,â€ while falling inflation in the euro area was another cause for concern.
In the U.S., the trade deficit narrowed in March as exports rebounded to the second-highest level on record, led by strong gains in sales of aircraft, autos and farm goods. The deficit declined to $40.4 billion, down 3.6 per cent from a revised February imbalance of $41.9 billion, which had been the biggest trade gap in five months.
Other data showed that U.S. house prices rose at a slightly slower pace in the 12 months that ended in March, a sign that weak sales have begun to restrain the housing marketâ€™s sharp price gains.
Data provider CoreLogic says prices rose 11.1 per cent in March compared with March 2013, down a bit from Februaryâ€™s 12.2 per cent year-over-year increase.
On a month-to-month basis, prices in March rose 1.4 per cent from February.
On the commodity markets, June crude in New York gained two cents to US$99.50 a barrel.
July copper was unchanged at US$3.06 a pound while June gold bullion faded 70 cents to US$1,308.60.