By Fergal Smith
(Reuters) -The Canadian dollar was barely changed against its U.S. counterpart on Tuesday as oil prices fell and data showed a widening of the Canadian trade deficit that was close to expectations.
The loonie was trading nearly unchanged at 1.3775 per U.S. dollar, or 72.60 U.S. cents, after moving in a range of 1.3764 to 1.3810.
Canada’s merchandise trade deficit widened in June to C$5.9 billion ($4.24 billion) as imports grew faster than exports due to a one-time high-value oil equipment import. Analysts had predicted the deficit would increase to C$6.3 billion from a downwardly revised C$5.5 billion in May.
“Despite the usual volatility, Canada’s trade figures came in line with expectations for June,” Shelly Kaushik, a senior economist at BMO Capital Markets, said in a note.
“While trade flows have recovered a touch from the spring, normalization is unlikely until the Canada-U.S. relationship stabilizes.”
The U.S. has increased tariffs on Canadian goods to 35% from 25%, but products covered by the U.S.-Mexico-Canada Agreement are exempt from duties. About 90% of Canadian exports to the U.S. in May were exempt under that trade deal.
The price of oil, one of Canada’s major exports, fell 1.4% to $65.35 a barrel on rising OPEC+ supply and worries of weaker global demand, while the U.S. dollar steadied against a basket of major currencies.
Canada’s employment report for July, due on Friday, could offer further clues on the state of the domestic economy. A Reuters poll of economists expects a gain of 13,500 jobs.
The Canadian 10-year yield was little changed at 3.382% after earlier touching its lowest level since July 7 at 3.360%.
(Reporting by Fergal Smith; Editing by Paul Simao)