TORONTO: The Canadian dollar weakened to a 17-day low against its US counterpart on Friday as Canadian retail sales fell more than expected and investors weighed the potential for a change of leadership in the United States to roil global trade.

The loonie was trading 0.2% lower at 1.3730 to the US dollar, or 72.83 US cents, after touching its weakest intraday level since July 2 at 1.3747. For the week, the currency was down 0.7%.

“Developments this week suggest investors are starting to consider the risks associated with a return of former President Trump to the White House next year,” Shaun Osborne, chief currency strategist at Scotiabank, said in a note.

US President Joe Biden faces former President Donald Trump in the November presidential election. Scotiabank has estimated that tariffs proposed by Trump on all exports to the United States could lead to a decline of over 3.6% in the level of Canadian economic activity relative to current forecasts.

Canada sends about 75% of its exports to the United States, including oil. US crude futures were down 3% at $80.30 a barrel, pressured by renewed hopes of a ceasefire in Gaza and a stronger US dollar.

Canadian retail sales fell 0.8% in May from April, compared with estimates for a decline of 0.6%, while a preliminary estimate showed sales down 0.3% in April.

The data, along with cooler-than-expected Canadian inflation data on Tuesday, supported bets the Bank of Canada will ease interest rates further.

The central bank will cut its benchmark rate for a second straight meeting on Wednesday by 25 basis points to 4.50%, according to a large majority of economists in a Reuters poll.

Canadian bond yields increased across the curve, tracking moves in US Treasuries. The 10-year was up 1.8 basis points at 3.399%.