In the U.S., the trade shortfall dropped to $40.9 billion in April from $51.4 billion deficit in March, while analysts had predicted the gap to narrow to $43.9 billion.
The trade deficit in Canada came in at $3.0 billion, similar to March’s reading, while analysts had estimated a narrow in deficit to $2.1 billion.
The green currency was also buoyed by ADP figures, which showed private sector employers added 201,000 jobs in May.
The loonie remains weak against the dollar as data released last week showed Canada’s GDP posted a worse than forecast contraction of 0.6 percent in the first quarter.
The BOC decided the previous week to hold its benchmark interest rate at 0.75 percent to avoid any oil-price shock.
Later in the day, the U.S. will release its services PMI data, which may signal an ease in expansion to 57.1 in May from 57.8 a month earlier.
However, the focus will be on Friday’s non-farm payrolls, as it provides clues about the health of the U.S. labor market and thereby when the Fed would raise its borrowing cost.
The USDCAD pair climbed to set a new high of 1.2505, yet struggling to remain above solid 61.8% Fibo resistance to the bullish wave that began on May 14.