The Canadian dollar rose against its U.S. counterpart on Thursday after data showed Canada’s trade surplus widened unexpectedly in April.

The surplus reached C$1.37 billion, surpassing economists’ forecasts and signaling stronger economic activity. This positive news provided a boost to the Canadian currency, which has been sensitive to shifts in commodity prices and global economic sentiment.

Analysts noted that the improved trade balance reflects increased exports, particularly in the energy sector. The rise in oil prices has contributed to the higher value of Canadian exports, further supporting the Canadian dollar.

The Canadian dollar’s performance was also influenced by broader market trends, including expectations for future interest rate hikes by the Bank of Canada. A stronger economy could prompt the central bank to tighten monetary policy sooner than anticipated, making the Canadian dollar more attractive to investors.

However, some cautioned that the Canadian dollar’s gains could be limited by ongoing concerns about the global economic outlook. Uncertainty surrounding the recovery in the United States and Europe could weigh on the Canadian economy, potentially dampening the currency’s upward trajectory.

Despite these risks, the positive trade data provided a welcome boost to the Canadian dollar, reinforcing its position as one of the best-performing major currencies in recent months.