Canada's merchandise trade deficit with the rest of the world nearly vanished in June as exports grew dramatically, Statistics Canada reported today.

The trade deficit came in at $476 million, compared to the revised $3.4-billion deficit recorded the month before. June's trade figures were markedly better than the $2.8-billion deficit that the market had been expecting..

Exports increased 6.3 per cent to $44.6 billion in June, while imports dropped 0.6 per cent to $45.1 billion. That's the best month-over-month increase in exports since December 2006.

The falling Canadian dollar, which has lost about 10 cents against the U.S. currency since the start of the year, finally appears to be giving a boost to Canadian companies that ship to American markets. Exports to the United States surged by 7.1 per cent in June.

"While a further leg down in oil prices will continue to weigh on the oil sector in Canada, the non-energy sector is likely to continue to benefit from an improving U.S. economy and low Canadian dollar," said TD economist Diana Petramala in a morning commentary, adding that this report will likely dampen speculation that the Bank of Canada might deliver another interest rate cut later this year.

David Madani, from Capital Economics, called the trade report a "positive sign" for the economy, but said "it remains to be seen whether the export sector can lift the economy out of its oil-related slump."

http://www.cbc.ca/news/business/canada-s-trade-deficit-narrows-dramatically-as-exports-surge-1.3179713