The Canadian dollar edged higher against the U.S.dollar as retail sales data and rising oil prices bolstered investor confidence.Canadian retail sales rose 1% in May, exceeding expectations, with gasoline station sales driving growth.June's preliminary data showed a 0.4% increase, signaling continued consumer spending strength.Analysts noted that while the economy showed momentum in Q2, challenges like tariffs, extreme weather, and energy price shocks loom.Oil prices surged 6.2% to $92.40 per barrel following attacks on Saudi oil tankers, fueling inflation fears and pushing the U.S.dollar higher.Canada's central bank faces pressure to raise interest rates, while speculators increased bearish bets on the loonie ahead of U.S.tariffs.Government bond yields climbed as rate hike expectations grew, with the 10-year bond hitting a five-month high.Prime Minister Mark Carney emphasized Canada's readiness to defend workers and businesses in trade disputes with the U.S.