The Canadian dollar tumbled Thursday after Statistics Canada reported that Canada's trade surplus rose to a smaller-than-expected $5.57 billion in August.

Economists had been expecting the surplus to come in at $6 billion to $6.1 billion.

Stats Can also reduced the size of July's surplus by almost a billion dollars to $4.89 billion.

The weaker-than-expected report helped to drive the Canadian dollar down 0.88 cents US against the U.S. dollar. The loonie was quoted at 84.57 cents US at the close of trading.

Canada's natural gas exports hit $3.3 billion in August, up from $2.9 billion in July. Gas exports were pushed higher by the expected fallout from the hurricanes that hit the U.S. Gulf Coast.

In August, the rise in natural gas sales helped boost Canada's merchandise exports to the world for the sixth time in the last eight months. Overall exports hit $37.98 billion for the month, up from $37.42 billion in July.

Meanwhile, imports slipped 0.4 per cent to just over $32.42 billion as the rise in energy imports, especially gasoline, failed to offset declines in all other sectors.

BMO Nesbitt Burns chief economist Sherry Cooper said rising natural gas prices will boost the trade surplus in the coming months.

"Note that natural gas alone accounted for almost 60 per cent the total trade surplus in August and that was before those prices really launched into orbit post-hurricanes," she said.