In June, Canada surprised economists by posting a trade surplus of C$638 million ($432 million), defying expectations of a C$2 billion deficit.

This marked the first time in four months that Canada's exports exceeded imports, with total exports rising by 5.5%.

The increase in exports was largely driven by a significant 11.7% rise in energy exports, particularly crude oil and unwrought gold.

The surge in oil exports was facilitated by the recently expanded Trans Mountain pipeline, which increased its output to 890,000 barrels per day.

Increased shipments to Asian countries played a crucial role in boosting crude oil exports, alongside the expansion of the pipeline.

Gold exports have also seen a steady rise, driven by central banks, especially in China, increasing their gold reserves amid global economic uncertainty.

On the import side, there was an 8.2% surge, particularly in passenger cars and light trucks, recovering from earlier production disruptions in the U.S.

Exports to the United States, Canada's largest trading partner, continued to grow for the third consecutive month, widening the trade surplus with the U.S. to its highest level since November 2023.

Following the release of the trade data, the Canadian dollar fell slightly against the U.S. dollar, trading at 1.3838.

Looking ahead, financial markets are anticipating a 25 basis point cut in the Bank of Canada's key policy rate in September, followed by another similar cut in October.

This comes after the Bank of Canada lowered its benchmark interest rate for the second consecutive month in July, aiming to stimulate economic growth.

Despite the positive trade figures, Canada's monthly GDP growth rate is expected to slow to 0.1% in June, down from 0.2% in May.