TORONTO: The Canadian dollar weakened against its US counterpart on Thursday as oil prices fell, while losses on Wall Street also weighed on the risk-sensitive commodity-linked currency.
Oil fell as rising exports from Iraq underlined the global oversupply situation, outweighing the effects of a surprise fall in US inventories the previous day.
US crude was down 0.7 percent to $37.49 a barrel.
Wall Street retreated as investors worried about weak global growth and uncertainty surrounding the Federal Reserve's plans to hike interest rates this year.
The Canadian dollar looks set to weaken slightly in the coming months because of the prospect of US Federal Reserve interest rate hikes and less-robust domestic economic data, a Reuters poll showed.
At 9:40 a.m. EDT (1340 GMT), the Canadian dollar traded at C$1.3128 to the greenback, or 76.17 US cents, weaker than Wednesday's close of C$1.3094, or 76.37 US cents.
The currency's strongest level of the session was C$1.3019, while its weakest was C$1.3155.
The value of Canadian building permits issued in February jumped by 15.5 percent on strength in the energy-producing province of Alberta, which has been hit by the oil price slump, Statistics Canada said.
Canadian government bond prices were higher across the maturity curve in sympathy with US Treasuries as risk appetite weakened.
The price of the two-year rose 3.5 Canadian cents to yield 0.529 percent and the benchmark 10-year was up 25 Canadian cents to yield 1.187 percent.
Canada's labor market report on Friday is expected to show that 10,000 jobs were added in March, rebounding from a decline in the previous month.
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