The Canadian dollar weakened past 1.375 per US dollar, its weakest level in two months, as a revived US dollar and persistent trade uncertainty clouded Canada’s economic outlook. On the external front, a string of high-profile agreements, most notably the US–Japan deal cutting auto tariffs to 15% and a parallel US–EU framework, has eased fears of a drawn-out tariff war, bolstering expectations for stronger US growth and a resolutely hawkish Federal Reserve. Canada, by contrast, remains without a comparable pact, leaving investors braced for possible unilateral measures from Washington. At home, a steeper-than-anticipated 1.1% decline in May retail sales underscored a cooling economy, spurring markets to factor in an earlier-than-expected pivot toward rate cuts by the Bank of Canada.