Canadian dollar strengthens as trade surplus hits widest in 14 years

TORONTO: The Canadian dollar strengthened against its US counterpart on Thursday as oil prices rebounded and data showed Canada posting its widest trade surplus since August 2008.

Canada’s trade surplus widened to C$5.3 billion ($4.1 billion) in May, as higher prices for energy products boosted exports and imports decreased.

The price of oil, one of Canada’s major exports, rose after steep losses in the previous two sessions, as investors returned their focus to tight supply.

US crude prices rose 2.5% to $100.98 a barrel, while the Canadian dollar was trading 0.2% higher at 1.3016 to the greenback, or 76.83 US cents. It traded in a range of 1.2981 to 1.3055.

Gains for the loonie came as the US dollar gave back some recent gains against a basket of major currencies and gains in chipmakers lifted stocks.

That helped calm investors after hawkish Federal Reserve comments increased the likelihood of a hefty interest rate hike later this month and raised fears over how much this could slow the economy.