TORONTO _ The Canadian dollar was down sharply Thursday morning amid a generally strengthening American currency and a sharp drop in oil prices.
The loonie backed off 0.66 of a U.S. cent to 79.87 cents.
Oil fell $2.07 to US$50.07 after the American Petroleum Institute reported that U.S. oil inventories jumped by 14.3 million barrels last week, far higher than the 3.1 million barrel buildup that analysts had expected.
Traders will also look to oil inventory data coming out later in the morning from the U.S. Energy Information Administration.
A huge supply/demand imbalance has been responsible for oil prices plunging more than 50 per cent from the highs of mid-2014.
Investors also focused on the Greek debt drama as the country's newly elected government formally requested a six-month extension of bailout loans. Early indications were it wouldn't find favour with fellow eurozone countries.
German Finance Ministry spokesman Martin Jaeger said that a letter from the new Greek government ``is not a substantial proposal for a solution'' and added that it amounts to a request ``for bridge financing without fulfilling the demands of the (bailout) program.''
Elsewhere on the commodity markets, April gold advanced $20.30 to US$1,220.50 an ounce while March copper dipped a penny to US$2.61 a pound.
The greenback was higher against other currencies after the release Wednesday of minutes from the most recent Federal Reserve meeting showing the central bank in no hurry to raise interest rates.
``The minutes reinforced that the committee is data dependent looking particularly for an improvement in the labour market and stabilization in inflation metrics but are significantly concerned with how to make the shift towards normalizing rates, which could force a delay in rate hikes,'' observed Camilla Sutton, Chief FX Strategist, Managing Director Scotiabank Global Banking and Markets.
The Fed had been expected by many analysts to start hiking rates later this year, very possibly as early as June. Sutton added such a timeframe is still a possibility as long as employment growth remains strong and inflation does not fall.