The Canadian dollar closed at C$1.5105 (66.20 US cents) on Thursday against C$1.5058 (66.41 US cents) from the previous session's close. It slumped as low as C$1.5160 (65.96 US cents), below the previous low of C$1.5146 set on May 25, after the Bank of Canada's official closing level was set.

With the Toronto Stock Exchange 300 composite index tumbling below 10,000 for the first time since mid-June, much of the Canadian dollar's weakness originated troubled domestic equity markets, analysts said.

"I think a lot of it obviously has to do with equities," said Mr Andrew Pyle, vice-president and senior economist at Bank of Nova Scotia in Toronto.

The TSE 300 subsequently recovered some of its losses, closing down 118.08 points - or 1.16 per cent - at 10,026.90.

"I wouldn't call it panic selling. I would simply suggest it's more of an orderly sell-off of Canada, which is not totally unexpected, given the move on equities right now and the anticipated move tomorrow," said Mr Jack Sptiz, regional director of foreign exchange with National Bank of Canada in Toronto.

"The flows got a lot heavier on the close. We saw some position covering and we saw it go through stops," Mr Spitz said. "There was a domestic name on the bid, and we've seen some foreign names on the bid as well," he added.The Canadian unit's slump on Thursday generated negative technical signals about the currency, market watchers said. "The bottom line is once you're through C$1.5150, this is not going to be a positive near-term outlook," Mr Pyle said.

-- REUTERS