The value of the currency ranged from C$1.0165, or 98.38 US cents to C$1.0273, or 97.34 US cents during the day, as the mood of investors moved from embracing risk to avoiding it, and back again.

Optimism over the state of the global economy took a hit early on in the day from weaker than forecast trade data out of China, which pointed to slowing world economic growth.

That took the steam out of commodity prices, which weighed on the resource-linked Canadian dollar. Canada is the top oil exporter to the United States and is a major producer of base metals and precious metals.

The price of US crude oil, which up until Wednesday had risen 13 percent over the previous five sessions, fell $1.34 to settle at $84.23 a barrel.

Gold, silver, and copper prices also fell on the back of the Chinese data.

"There was some concern in the wake of the Chinese trade numbers, which showed softening in both export and import growth in September," said Doug Porter, deputy chief economist at BMO Capital Markets, who added that it should not be surprise that global growth had cooled slightly.

"So, while that initially rattled the market ... there is still some underlying optimism that the worst case scenario is being taken off the table for Europe."

Slovakia approved a plan to bolster the euro zone's rescue fund on Thursday, becoming the last of the 17 members in the bloc to do so, clearing the way for a bolder effort to tackle Europe's sovereign debt crisis, which threatens global financial stability.

The Canadian dollar closed the North American session at C$1.0197 to the US dollar, or 98.07 US cents, down slightly from Wednesday's North American close of C$1.0173 to the US dollar, or 98.30 US cents.

On Wednesday, the currency touched its highest level versus the greenback since Sept. 22 hitting C$1.0135, or 98.67 US cents.

Trade data out of Canada on Thursday came in slightly better than expected, with the trade deficit growing to C$622 million ($610 million) in August as imports grew at a faster rate than exports. Analysts had forecast the deficit would be C$1.0 billion.

On the radar for investors, G20 finance ministers and central bank governors are meeting in Paris on Thursday and Friday ahead of a G20 summit next month in Cannes, France.

Corporate earnings season has also kicked off, and gets into full swing next week.

"Obviously, European woes are still in the foreground, but if we can get through this weekend without any major disturbances in the euro zone, earnings are going to be the major focus next week," Steve Butler, director of foreign exchange trading at Scotia Capital.

Another focus for markets will be US retail sales numbers for the month of September, due to be released on Friday.

Canadian bond prices were higher across the board as declines in equity markets increased demand for the safety of government debt.

A US Treasury auction of $13 billion in 30-year bonds that attracted strong interest was also supportive of the market, Porter said.

The two-year Canadian government bond rose 12 Canadian cents to yield 0.987 percent, while the 10-year bond climbed 57 Canadian cents to yield 2.289 percent. The 30-year bond rose C$1.25 to yield 2.891 percent.