The current account deficit narrowed in the third quarter, improving from a revised figure of -21.56 billion to a smaller deficit. This improvement was mainly driven by a reduction in the trade in goods deficit. Exports increased during the quarter, while imports declined, helping to close the gap.

Additionally, both investment income and trade in services contributed to the overall narrowing of the current account deficit, signalling a more balanced external position.

On the financial account side, unadjusted for seasonal variation, the inflow of funds from abroad was largely used to finance the current account deficit. This inflow was primarily driven by foreign investment in Canadian debt securities. Meanwhile, Canadian investors continued to increase their holdings in US securities. At the same time, foreign investors renewed their interest in Canadian securities during the third quarter.

Original Source: Giuseppe Dellamotta of investinglive.com