USD/CAD on session highs after US, Canadian trade balance reports

US dollar climbed to its highest level on Tuesday trade against its Canadian counterpart, following better than projected trade balance results from the United States and Canada.

USD/CAD hit a session high at 1.0387 13:16 GMT, after which consolidation followed at 1.0380. Support was expected at current session low, 1.0346, while resistance was to be encountered at August 5th high, 1.0402.

Earlier today the Commerce Department reported that US trade deficit decreased by 22.4% in June to 34.22 billion USD, the lowest value since the autumn of 2009. It is expected that this result may cause positive influence upon US GDP, as the latter was to grow by 1.7% during the second quarter of the year. Experts had expected a lesser drop in the deficit figure, to 43.500 billion USD. In May deficit was revised up to 44.100 billion USD from 45.027 billion USD previously. Result was supported by lower import figure, a 2.5% drop in June to seasonally adjusted 225.4 billion USD, while at the same time US export rose by 2.2% to 191.2 billion USD. Deficit, resulting from trade with Europe shrank to 6.74 billion USD in June, as in May it was 12.36 billion USD, due to fewer imported goods and services from Europe by the United States.

Meanwhile, in Canada it became clear that the trade deficit contracted unexpectedly in the month of June, despite the revised up deficit figure during the preceding month and as export rose twice as much as import. In June Canadian deficit declined to 0.469 billion CAD, while in May it was revised up to 0.780 billion CAD from 0.303 billion CAD previously. Preliminary estimates pointed that the figure will widen to 0.560 billion CAD. Canadian goods export rose by 1.4% in June, while import advanced 0.6%.

Elsewhere, the loonie, as Canadian dollar is also known, was trading lower against the euro, as EUR/CAD pair advanced 0.60% to 1.3824 at 14:25 GMT. GBP/CAD added 0.31%, trading at 1.5965 at 14:26 GMT.