TORONTO, May 24 - The Canadian dollar strengthened against its U.S. counterpart on Friday, clawing back much of its weekly decline, as investor sentiment picked up and preliminary domestic data showed retail sales rebounding in April.
The currency rose as a University of Michigan survey showed consumers' inflation expectations improved in late May, boosting prospects the Federal Reserve would begin easing policy by September. Wall Street stocks rallied and the price of oil, one of Canada's major exports, rose after four straight days of declines. U.S. crude oil futures were up 1.2% at $77.79 a barrel.
Canadian retail sales contracted for a third consecutive month in March, falling 0.2%, underscoring the impact of high interest rates on consumer spending. Still, a preliminary estimate of April's sales figure showed sales were likely to increase by 0.7%.