Loonie dips as oil retreats, U.S dollar advances

The Canadian dollar retreated Thursdayamid a drop in the price of oil, coupled with a higher U.S. dollar.

The looniedropped0.48of a U.S. cent to end at 76.31cents.The dollar has now fallenfor three straight days, including a dip of 0.71 of a U.S. cent on Wednesday.

The loonie is closely tied to the price of oil, andthe price of benchmark North American crude dropped 11 cents to finishat $48.67 USper barrelOil futures had been down more than $1 earlier in the day before they recovered most of their losses.

"The main factor weighing on prices is the much appreciated U.S. dollar," Carsten Fritsch, analyst at Commerzbank, told Reuters.

"What is more, rain forecast in the Canadian oil province of Alberta is giving rise to hopes that the devastating wildfires there could be brought under control."

• Companies airlift Fort McMurray oilsands workers under new fire threat

Oil was lower after the U.S.Energy Information Administration saidWednesday that crudeinventories unexpectedly rose by 1.3 million barrels to 541.3 million barrels for the week ended May 13.

The U.S. dollar gained strength and stockmarkets sold off as investors digested the possibility of a June interest rate hike by the U.S. Federal Reserve.

• Fed signals interest rate hike firmly on the table for June

The Dow Jones industrial average fell 91.22pointsto close at 17,435.40.The Standard& Poor's 500 lost 7.59points to 2,040.04, and the Nasdaqcomposite pulled back 26.59 points to end at 4,712.53.

On Bay Street,theS&P/TSX composite index ended the day with a small loss as it got alift from materials, gold and consumerstaples stocks. The index dipped 8.69 points to 13,817.32.