TORONTO: The Canadian dollar strengthened against its US counterpart on Tuesday, extending its recovery from a 19-month low, as oil prices rose and retail sales data pointed to domestic economic strength.

The loonie was trading 0.3% higher at 1.2938 to the greenback, or 77.29 US cents, after trading in a range of 1.2907 to 1.2986. On Friday, it touched its weakest since November 2020 at 1.3078.

Canadian retail sales rose 0.9% in April, beating forecasts of a 0.8% gain and including higher volumes. A preliminary estimate showed that sales were up 1.6% in May.

“With today’s figures suggesting that demand within the economy remains strong ... the Bank of Canada will remain on track to hike aggressively to try and reduce excess demand,” Andrew Grantham, senior economist at CIBC Capital Markets, said in a note.

Money markets see about a 75% chance that the Bank of Canada would raise interest rates by three quarters of a percentage point next month, which would be its biggest hike in 24 years.