Canadian Dollar Clings for Gains as Trade Data Boosts Hope for Tension Relief

Canadian Dollar Keeps the Momentum: A Quick Glance at Friday’s Wins

The loonie was on a roll this Friday, nudging the U.S. dollar in the wrong direction. Inside Canada, a surge in trade numbers, and outside, some U.S. surprises, all put the loonie in a sweet spot.

What’s Happening on Home Front?

December trade balance sober up: A tidy CAD 708 million surplus, your first taste of a positive balance since early 2024.
Exports shined: Up 4.9%, with energy products leading the charge.
Currency dip does the trick: The loonie’s slight wobble pushed Canadian exports out of the country at a higher value.
On the flip‑side, the annual trade deficit widened to CAD 7.2 billion in 2024 because imports grew faster than exports.
The U.S. remains a big player: 76% of Canadian exports, 62% of imports.

That heavy U.S. dependency puts the loonie in a delicate spot amid swirling global trade frictions.

Inside the Numbers: KPI Q&A

January S&P Global Services PMI: A snatched bump to 49 points, still in contraction territory for the second month.
Uncertainty bites: A sharp dip in fresh export contracts weighs heavily on overall performance.

Why the U.S. Could be the Looney’s “Friend” for a Bit

The U.S. offered a small, unexpected rollover when the ISM Services PMI slid down. If market players read that as a hint that the Fed might be loosening (a dovish drift), the U.S. dollar could take a hit, giving the loonie a chance to climb.

Future Forecast: Trade Tensions & U.S. Job Numbers

Global trade tensions are still tight, adding a layer of uncertainty.
Upcoming US Nonfarm Payrolls (NFP) report could change the game.
If the NFP comes in strong—especially after today’s ADP release—it would reinforce the narrative of a resilient U.S. labor market.
Such a scenario would likely help the greenback, creating selling pressure on the loonie.