According to the most recent Statistics Canada report, exports to the United States rose in December, while exports to economies excluding Canada’s largest trade partner hit a new record in the month.  The balance of trade helped the Canadian economy to sport a monthly trade surplus that is at a 3-year high – totaling C$2.7 billion.  The figure was surprisingly far better than anticipated by the market – with estimates of a C$550 million trade surplus for the month – and more than doubling the C$1.2 billion witnessed in November.

With that said, the headline figure was great.  But what’s even better is the fact that trade with other nations excluding the United States rose to C$11.8 billion or higher by 2.5%.  This is a new record for the subindex component and is a sign of global economic improvement.  Most of all, the improvement stands as a sign of better things to come for the world’s tenth largest economy.  The export sector has been under a lot of stress resulting from the 2008 global financial crisis – leaving it relatively weak over the last 3 years.

But, now with clear signs of a pickup, the sector may contribute far more gains when it comes to overall economic growth – boosting actual headline figures against low forecasts.  Bank of Canada growth estimates are in the realm of a lackluster 2% for all of 2012.

The sentiment should boost demand for the Canadian dollar against more troubled currencies like the Euro in the short term – as the Greek saga continues.  With market risk still looming over potential Euro gains, and European  interest rates likely to go nowhere but down, speculation will turn to basic economic fundamentals when reaching out for Canadian based assets and the country’s currency.

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