The loonie had rallied this week as investor fears of a more unfavorable trade outlook for Canada abated and after U.S. President Donald Trump signed orders on Tuesday smoothing the path for the Keystone XL oil pipeline.
If constructed, Keystone would provide oil producers in Canada with a quicker route to send crude to U.S. Gulf Coast refiners.
But analysts and traders said the C$8 billion pipeline was far from being a certainty.
The U.S. dollar <.DXY> rebounded after its worst run since August as investors refocused on the chances of higher U.S. inflation and growth.
At 9:16 a.m. ET (1416 GMT), the Canadian dollar
The currency's weakest level was C$1.3130, while it touched its strongest since Jan. 18 at C$1.3054.
Losses for the Canadian dollar came even as prices of oil, one of Canada's major exports, rose. U.S. crude
Canadian government bond prices were mixed across the yield curve, with the two-year
The 10-year yield touched its highest since Dec. 16 at 1.851 percent as Wednesday's record highs on Wall Street reduced demand for safe haven assets such as bonds.
(Reporting by Fergal Smith; Editing by Meredith Mazzilli)