TORONTO -- The Canadian dollar was down sharply Thursday morning as the American currency strengthened and oil prices fell.

The loonie was down 0.48 of a U.S. cent to 80.05 cents just before noon but had been as low as 79.71 cents US.

Canada's dollar plunged earlier Thursday as oil prices fell after an American Petroleum Institute report that U.S. oil inventories increased by 14.3 million barrels last week -- far more than the estimate of 3.1 million barrels.

However, oil prices bounced off lows after other data from the U.S. Department of Energy showed a buildup of just 7.7 million barrels.

Still, rising inventories of crude are bad news since it was been a huge supply/demand imbalance that has been responsible for oil prices plunging more than 50 per cent from the highs of mid-2014.

March crude declined 45 cents to US$51.69 late in the morning after earlier going as low as $49.15.

Investors also focused on the Greek debt drama as the country's newly elected government formally requested a six-month extension of bailout loans. There were early indications that 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 $10.80 to US$1,211 an ounce while March copper was unchanged at US$2.62 a pound.

The greenback was higher against other currencies after the release Wednesday of minutes from the most recent meeting of the Federal Reserve's top policy committee showed the central bank was 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.