Overview
The Canadian dollar weakened against the U.S. dollar on 4 August 2026, falling 0.2 percent to 1.4070 per U.S. dollar (71.07 U.S. cents) after reaching an intraday low of 1.4076 the previous Wednesday.
Trade Balance
Canada recorded its fourth consecutive month of trade surpluses, with the June surplus reaching a four‑year high of C$3.86 billion (approximately US$2.75 billion), surpassing analysts’ consensus forecast of C$3 billion.
Economic Growth
Preliminary data indicated that the Canadian economy expanded at an annualised 3.4 percent rate in the second quarter, supporting the view that rebound in export volumes from 2025 lows contributed to the strength in GDP.
Manufacturing
Separate data released on the same day showed that Canada’s manufacturing sector expanded in July at the fastest pace in more than four years, driven by rising domestic activity that boosted production and new orders, although weak international demand raised doubts about the durability of the expansion.
Oil Prices
The price of crude oil, a major Canadian export, fell 5.7 percent to US$75.80 per barrel after comments from Qatari and U.S. officials raised expectations of a diplomatic resolution to the Iran‑related conflict in the Strait of Hormuz, which could improve oil flows.
Tariff Developments
The United States announced new tariffs on nearly US$20 billion worth of Canadian goods in the previous month, creating a potential head‑wind for the export‑driven momentum highlighted by the trade‑surplus data.
Commentary
Andrew Grantham, senior economist at CIBC Capital Markets, noted that while the export rebound underpinned the Q2 GDP strength, the looming threat of new tariffs could quickly slow or stall the export surge.