By Kim Mackrael
OTTAWA -- Canada's trade deficit widened in October as lower energy prices pushed down the overall value of Canada's exports.
Canada posted a trade deficit in October of 1.165 billion Canadian dollars ($872 million), Statistics Canada said Thursday. Market expectations were for a C$730 million deficit, according to Royal Bank of Canada.
September's trade data were revised to show a deficit of C$891 million, compared with a previous estimate of a C$416 million deficit.
The data comes one day after the Bank of Canada announced it would leave the key interest rate unchanged at 1.75% amid concerns about slowing economic momentum and weak oil prices. While the central bank continues to target a neutral range, estimated at 2.5% to 3.5%, markets generally interpreted its communications on Wednesday as a sign that a January rate increase has become less likely.
The Bank of Canada gave particular attention in its statement on Wednesday to the large differential between western Canadian oil prices and the U.S. benchmark, the West Texas Intermediate. The provincial government of Alberta, where most of Canada's oil is extracted, announced this week that it will mandate production cuts to help alleviate a backlog of crude oil in the province.
Canadian exports fell 1.2% to C$49.32 billion in October, led by a sharp drop in prices for exports of crude oil. Crude oil export prices were down 15.4% in the month, marking the strongest monthly decrease since February 2016, Statistics Canada said.
On a volume basis, exports rose 1.2% from the previous month.
Meanwhile, imports shrank 0.6% to C$50.49 billion, led by motor vehicles and parts, and basic and industrial chemical, plastic and rubber products. Import volumes were largely unchanged.
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