The Canadian dollar weakened past 1.37 per USD, as fresh US tariff threats and trade-policy uncertainty overwhelm earlier strength. President Trump’s announcement that he was terminating all trade discussions with Canada over its new digital services tax - and warning of imminent retaliatory tariffs - has rattled exporters and undermined confidence in near-term growth. Domestically, Canada’s economy was poised for back-to-back 0.1% monthly contractions in April and May, highlighting its vulnerability to US levies and dampening the outlook for trade-sensitive sectors. Meanwhile, oil prices remain subdued amid a stable Middle East, stripping the loonie of a key terms-of-trade support pillar. Although the Bank of Canada held its policy rate at 2.75%, citing sticky core inflation and signalling that further cuts are unlikely until disinflation is well-entrenched, this hawkish stance has been insufficient to counteract the combined drag of revived tariff fears.