The Canadian dollar strengthened past 1.37 per US dollar as investors balanced sticky domestic inflation against recent US currency softness. Canada’s trimmed-mean core CPI, the BoC’s preferred gauge of underlying price pressures, remained unchanged at 3% in June, underscoring expectations that the BoC will maintain a hawkish stance and hold its overnight rate at 2.75% rather than pivot prematurely to easing. On the trade front, while USMCA-covered exports remain exempt from the 35% duties already imposed on other partners, President Trump’s weekend threat of 30% tariffs on EU and Mexican imports effective August 1st has reignited fears of a broader US tariff offensive. The risk of Washington extending similar measures beyond its USMCA carve-outs has heightened general trade-war jitters.Concurrently, softer-than-expected US inflation and retail sales data have weighed on the US dollar, amplifying the Canadian dollar’s gains.