Canadian dollar takes cue from improved retail sales data for January

TORONTO – The Canadian dollar moved higher early Thursday after a rebound in the latest retail sales data that suggested the domestic economy may be regaining steam.

The loonie rose 0.42 of a cent to 97.94 cents U.S., before stock markets opened.

The report from Statistics Canada said that retail sales rose one per cent in January to $38.9 billion, on higher sales at motor vehicle and parts dealers.

Sales at motor vehicle and parts dealers were up 2.8 per cent in January, partially offsetting the 6.5 per cent drop in December.

“Although the headline print posted a healthy rebound, much of that was due to costlier autos,” said CIBC World Markets economist Emanuella Enenajor in a note.

In commodities, the May crude contract on the New York Mercantile Exchange fell 16 cents to $93.34.

April bullion rose $2.60 to $1,610.10.

Later in the day, Finance Minister Jim Flaherty will unveil the latest federal budget, which is expected to shuffle government spending priorities without adding any new money.