September 4, 2019 / 1:21 PM / 2 months ago

UPDATE 1-Canada posts wider-than-expected trade deficit in July

 (New throughout, adds details and comment from economist)
    By Fergal Smith
    TORONTO, Sept 4 (Reuters) - Canada posted a
wider-than-expected trade deficit in July as imports rose and
exports declined, data from Statistics Canada showed on
Wednesday, a sign that the boost to the domestic economy from
trade in the second quarter may not be repeated.
    Canada's trade deficit was C$1.12 billion ($0.84 billion) in
July, while the prior month's surplus was revised to show a
C$0.06 billion deficit. Analysts had forecast a deficit of
C$0.40 billion in July.
    "Canada's trade balance took a dive into the red in July,
playing into fears that Q2's big growth driver, exports, would
go missing in Q3," Avery Shenfeld, chief economist at CIBC
Capital Markets, said in a note.    
    Data on Friday showed that the Canadian economy expanded at
a surprisingly strong annualized rate of 3.7% in the second
quarter, a pace much higher than the Bank of Canada had
predicted, thanks to a resurgence in goods exports.             
    The Bank of Canada was due to make an interest rate decision
at 10 a.m. (1400 GMT). Money markets expect the benchmark
interest rate to be left on hold at 1.75%. They do expect the
central bank to ease by the end of the year.           
    Exports edged down by 0.9% in July partly due to lower trade
in crude oil, as well as farm, fishing and food products.
Imports were up by 1.2%, largely on consumer goods and
locomotive cars.
    Exports to the United States fell 1.1%, while imports from
the United States rose 1.6%, narrowing Canada's trade surplus
with its southern neighbor to C$4.6 billion.
        
      ($1=$1.3343 Canadian)

 (Reporting by Fergal Smith; Editing by David Gregorio)
  
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