2014.09.1122:42:26UTC+00Canadian dollar drops to 5-month trough

The Canadian dollar erased 1% versus the US dollar Thursday, gaining momentum as it broke the C$1.10 carrier on its third attempt this week to break through the closely monitored resistance level.

Earlier, the loonie was pushed lower by decline in oil prices but it continued to decrease to a five-month low.

Markets have been focused this week, endeavoring to gauge the timing of Federal Reserve’s interest rate hikes.

"It seems like it's a broad day for U.S. dollar buying and we might have successfully pierced that C$1.10 psychological resistance level that's held in place over the last couple of months," said David Tulk, Chief Canada Macro Strategist at TD Securities.

The currency traded at C$1.1047 to the US dollar or 90.52 US cents, weaker than Wednesday's C$1.0935 or 91.45 US cents.

The loonie reached a session low of C$1.1059, its lowest since April. It has erased around 1.5% so far this week, on course for its worst week since early January when caught in a heavy selloff.