The dollar-value of the merchandise trade balance can be broken down to show the imports, exports and balance of trade with various partners, such as the U.S., Europe and Japan. These can provide information on the shifting pattern of trade.
A rising trade surplus would usually suggest rising exports, which are supportive of Canadian production and growth. But, over short time periods, variation in the trade balance can be dominated by autos or energy.
The United States accounts for the vast majority of Canadian trade, therefore the balance with regard to the U.S. receives a great deal of attention and can have an impact on the value of the Canadian dollar.
