{"id":30572,"date":"2026-03-12T20:59:14","date_gmt":"2026-03-12T20:59:14","guid":{"rendered":"https:\/\/www.vtmarketsglobal.com\/en\/uncategorized\/30572\/"},"modified":"2026-03-12T20:59:14","modified_gmt":"2026-03-12T20:59:14","slug":"rbc-economist-abbey-xu-reports-canadas-trade-gap-widened-in-january-with-exports-and-imports-falling-amid-volatility","status":"publish","type":"post","link":"https:\/\/www.vtmarketsglobal.com\/en\/live-updates\/30572\/","title":{"rendered":"RBC economist Abbey Xu reports Canada\u2019s trade gap widened in January, with exports and imports falling amid volatility"},"content":{"rendered":"Canada\u2019s merchandise trade deficit widened to $3.6 billion in January from $1.3 billion in December. Exports fell by 4.7% and imports fell by 1.1%.\n\nMonthly trade results remain affected by irregular shipments, including gold, motor vehicles, and aircraft. Net trade is currently subtracting from Q1 GDP growth.\n\n<h3>Outlook For Near Term Trade<\/h3>\nPart of January\u2019s deterioration is expected to be reversed in February. Higher energy prices linked to the conflict in the Middle East are expected to lift Canada\u2019s net exports in March.\n\nEarly 2026 trade is taking place with a more stable trade policy backdrop. In January, 89.5% of exports were duty-free to the US, up from 89.2% in December.\n\nThe labour market has shown per-person improvement, with the unemployment rate edging lower in recent months. Domestic demand has continued to grow on balance.\n\nCanada&#8217;s trade deficit widened to $3.6 billion in January, which is currently weighing on first-quarter GDP growth. This headline weakness was driven by a 4.7% drop in exports, creating some bearish sentiment. The initial data suggests a drag on the economy that could pressure the Canadian dollar.\n\n<h3>Trade Driven Currency Strategy<\/h3>\nHowever, we see the January weakness as temporary, heavily influenced by volatile gold and auto shipments. The key factor for the coming weeks is the conflict in the Middle East, which is expected to boost our net exports in March. Recent data confirms this, with West Texas Intermediate crude prices climbing above $95 a barrel, a level not seen since late 2024.\n\nThis creates a potential opportunity for traders betting on a stronger loonie in the near term. The negative January report may be fully priced in, so we are looking at call options on the Canadian dollar expiring in late April or May. This strategy would profit from the expected improvement in the February and March trade figures.\n\nWe remember how the currency lagged for much of 2025 as our interest rate policy diverged from the U.S. A strong rebound in energy exports could reverse that trend. The stable trade backdrop with the U.S., where nearly 90% of our exports are duty-free, provides a solid foundation for this outlook.\n\nFurthermore, the domestic economy remains resilient, with the unemployment rate holding steady at 5.7% and signs of growing demand. This strength, combined with recent inflation ticking up to 2.9% in February, limits the chance that the Bank of Canada will cut rates. This underlying support should provide an additional tailwind for the currency against the US dollar.\n\n<b><a href=\"https:\/\/www.vtmarkets.com\/trade-now\/\">Create your live VT Markets account<\/a>\u00a0and\u00a0<a href=\"https:\/\/myaccount.vtmarkets.com\/login\">start trading<\/a>\u00a0now. <\/b>\n<p>\r\n\r\n<p><strong>Start trading now &#8211; Click <a href=\"https:\/\/www.vtmarketsglobal.com\/en\/trade-now\/\">here<\/a> to create your real VT Markets account <\/strong> <\/p>\r\n<!-- \/wp:post-content -->","protected":false},"excerpt":{"rendered":"<p>Canada\u2019s trade deficit hit $3.6B in January as exports dropped; irregular shipments and energy prices sway outlook.<\/p>\n","protected":false},"author":38,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46],"tags":[],"class_list":["post-30572","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":[],"aioseo_notices":[],"featured_image_src":null,"featured_image_src_square":null,"author_info":{"display_name":"josephine","author_link":"https:\/\/www.vtmarketsglobal.com\/en\/author\/josephine\/"},"_links":{"self":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/30572","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/comments?post=30572"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/30572\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=30572"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=30572"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=30572"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}