The Canadian dollar traded little changed against its U.S. counterpart after paring earlier losses on Thursday, helped by oil price gains as investors sought clues on the relative likelihood of tighter monetary policy.

"The market is trying to get a sense of whether the Bank of Canada is hiking alone or if it will be joined by other central banks, specifically the Bank of England and the Federal Reserve," said Adam Button, a currency analyst at ForexLive in Montreal.

At 4 p.m. ET, the Canadian dollar was trading at $1.2185 to the greenback, or 82.07 cents US, down 0.1 per cent.

The loonie has rallied 13 per cent against the greenback since early May, boosted by a rapid expansion in the Canadian economy that prompted the Bank of Canada to raise interest rates in July, its first hike in nearly seven years, and again last week. The central bank's policy rate sits at 1 per cent.

The currency's strongest level of the session was $1.2157, while it touched its weakest since Sept. 7 at $1.2240, after firmer U.S. inflation data briefly boosted the greenback. 

Oil prices rose, with Brent closing at a five-month high, after a string of reports forecast the market would tighten further as fuel demand increased. U.S. West Texas Intermediate crude broke above US$50 a barrel and settled 1.2 per cent higher at US$49.89, its highest close since July 31.

"There is some major push and pull in the Canadian dollar at the moment," Forexlive's Button said.

The earlier slip in the Canadian dollar came as a flurry of disappointing data from China suggested the world's second-largest economy is finally starting to lose some momentum as borrowing costs rise. China is a major buyer of commodities produced by countries such as Canada.

Canadian new home prices rose 0.4 per cent in July from June, slightly exceeding economists' forecasts for a gain of 0.3 per cent. Vancouver had strong demand from buyers, while prices in Toronto were unchanged for a second straight month following provincial measures to rein in the market, data from Statistics Canada showed.

Canadian government bond prices were mixed across a flatter yield curve, with the two-year down 2 cents to yield 1.578 per cent and the 10-year adding 9 cents to yield 2.058 per cent. The 10-year yield touched its highest intraday since October 2014 at 2.105 per cent before pulling back.