FX.co ★ Canadian Dollar Weakens to 2-Month Low

The Canadian dollar recently fell to over 1.375 per US dollar, marking its weakest value in two months. This drop is attributed to a strengthening US dollar and ongoing trade uncertainties that negatively impact Canada’s economic outlook. On the international stage, several significant agreements, notably the deal between the US and Japan to reduce auto tariffs to 15%, along with a corresponding US-EU framework, have allayed concerns about a prolonged tariff conflict. These developments have increased expectations for robust US economic growth and a steadfastly hawkish stance from the Federal Reserve. In contrast, Canada has not secured a similar agreement, leaving investors worried about potential unilateral actions from Washington. Domestically, a sharper-than-expected 1.1% decrease in retail sales in May highlighted a cooling economy, prompting markets to anticipate that the Bank of Canada might shift toward rate cuts sooner than previously anticipated.