By Eileen Bircher

(SP) Toronto - The trade gap in Canada suddenly widened in July to its broadest level since 1971, cramped by its neighbor to the South whose own trade gap narrowed 14%.

Statistics Canada reported that imports increased 2% in July while exports fell 0.7%.

That was the largest trade imbalance since Statistics Canada began tracking the economic data.

Canada's trade has been in imbalance since the global recession began in December 2008, prior to that, Canada had enjoyed a trade surplus.

A stronger Loonie has contributed to the trade imbalance, close to on par with the U.S. dollar.  Yesterday, the Loonie jumped 1% after Canadian Central Bank announced a 0.25% increase in the key interest rate, the third this year.