TORONTO: The Canadian dollar weakened to a nearly seven-week low against its US counterpart on Tuesday, with the currency breaking out of its recent holding pattern as oil prices fell and the greenback broadly gained.

At 4 p.m. EST (2000 GMT), the Canadian dollar was trading 0.5 percent lower at C$1.2952 to the greenback, or 77.21 US cents.

"It's a big dollar move," said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York. "We had resistance right around 1.2900. When we broke that we nearly got to 1.3000."

The currency hit its weakest level since March 21 at C$1.2998, while the US dollar surged to a 2018 high against a basket of major currencies.

The price of oil, one of Canada's major exports, recouped some losses after US President Donald Trump confirmed the US will withdraw from the Iran nuclear deal, in a volatile session in which prices slumped as much as 4 percent earlier in the day.

US crude oil futures settled $1.67 lower at $69.06 a barrel.

Losses for the loonie came as investors weighed prospects for the North American Free Trade Agreement (NAFTA).

Canadian, Mexican and US officials hailed progress on revamping NAFTA as efforts focused on crafting new rules for the auto sector, but there was no sign of a major breakthrough.

Canadian government bond prices were lower across the yield curve in sympathy with US Treasuries.

The two-year dipped 3.5 Canadian cents to yield 1.934 percent and the 10-year declined 18 Canadian cents to yield 2.348 percent.

Canadian housing starts declined in April to a seasonally adjusted annual rate of 214,379 units as builders responded to slowing sales in Toronto, Canada's largest city, data from the Canada Mortgage and Housing Corporation showed on Tuesday.

Canada's jobs report for April is due on Friday.