UPDATE 2-Canada's November trade deficit narrows as exports edge up

Wed Jan 6, 2016 11:06am EST
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By David Ljunggren

OTTAWA Jan 6 (Reuters) - Canada's exports grew for the first time in four months in November, cutting the trade deficit in a sign the country's weak currency is helping manufacturers even as the price of oil slides.

Statistics Canada said on Wednesday the deficit narrowed to C$1.99 billion ($1.41 billion) from C$2.49 billion in October. Analysts polled by Reuters had forecast a shortfall of C$2.60 billion.

Overall exports grew by 0.4 percent to C$43.25 billion, pushed up by shipments of motor vehicles and parts, metal ores and forestry products. Energy exports slumped by 6.6 percent to hit their lowest since May 2009.

November marked the 15th consecutive monthly trade deficit, reflecting the continuing economic damage caused by low oil prices that have helped drag the Canadian dollar down to a 12-year low.

The weak currency, though, can help exporters by making their products more competitive.

"The main reason we are seeing Canada's trade balance improve despite the slaughter of commodity prices ... is the weak Canadian dollar," said Sal Guatieri, a senior economist at BMO Capital Markets.

Guatieri, speaking by phone, said the struggling economy should benefit from the weak currency and continued growth in U.S. demand.   Continued...