Canada saw an unexpected trade surplus in June, largely driven by the significant increase in crude oil and unrefined gold exports, with the surplus reaching 638 million Canadian dollars (461 million US dollars), defying analysts' expectations of a trade deficit of 1.84 billion Canadian dollars.

This is the first time in four months that exports have exceeded imports, according to data released by Statistics Canada.

Exports also saw a significant increase of 5.5% in June, with crude oil and gold being the main contributors. In terms of volume, exports grew by 3.8%.

Conversely, imports also rose but at a slower pace of 1.9%, supported by the automotive sector, particularly light vehicles and trucks. The volume of imports increased by 1.3%.

The Bank of Canada, which cut the benchmark interest rate for the second consecutive month in July, is focused on stimulating economic growth. Financial markets expect a 25 basis point cut in the central bank's key interest rate at its meeting in September, with another cut expected in October.

The central bank is optimistic that economic growth will accelerate in the latter half of 2024, supported by strong exports and a return of household spending facilitated by lower borrowing costs. However, monthly GDP growth in Canada is expected to slow to 0.1% in June from 0.2% in May.

Following the release of the trade data, the Canadian dollar slightly weakened, trading down 0.11% to 1.3838 against the US dollar, equivalent to 72.26 US cents.

Energy exports increased by 11.7% in June, boosted by higher crude oil shipments and prices. This rise in crude oil exports is partly attributed to increased shipments to Asian countries via the recently expanded Trans Mountain pipeline.

The increase in total imports was led by vehicles and parts, as well as consumer goods.

Notably, imports of passenger cars and light trucks rose by 8.2% to a record 6.8 billion Canadian dollars, recovering from production disruptions and delivery delays in the United States that occurred in late 2023 and early 2024.

Canada's exports to the United States, its largest trading partner, rose for the third consecutive month and outpaced the growth in imports.

This has resulted in Canada's trade surplus with the United States reaching its highest level since November 2023.