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Canada’s Record Current Account Deficit and Its Implications
Canada’s Record Current Account Deficit and Its Implications
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BTCCSquare news:
Canada's current account deficit ballooned to a record C$21.16 billion in Q2, the largest gap since at least the 1980s. The figure far exceeds both the C$1.32 billion shortfall in Q1 and economist expectations of a C$19.3 billion deficit. U.S. tariff policies have severely disrupted cross-border trade, with goods exports plunging 13.1% quarterly—a retreat to 2021 levels.
The goods trade deficit hit an unprecedented C$19.6 billion, driven by collapsing shipments to Canada's dominant U.S. market. Such persistent deficits typically exert downward pressure on currencies, though the loonie remains 4.5% stronger year-to-date at C$1.377 per USD. "These flows must reverse or the CAD faces headwinds," warns BMO strategist Benjamin Reitzes.
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