TORONTO: The Canadian dollar fell to its lowest in nearly three weeks against the greenback on Thursday, pressured by domestic data showing a surprise drop in factory sales and US data that upset hopes the global economy is stabilizing.

US retail sales recorded their biggest drop in more than nine years in December as receipts fell across the board, suggesting a sharp slowdown in economic activity at the end of 2018.

"It seems to be at this point less about what's going on in the Canadian domestic economy and more a focus on what is going on in the global economy and by that I mean, retail sales today out of the US have raised concerns about the direction of the US economy," said Tim Alt, a portfolio manager at Aviva Investors.

Canada, which sends about 75 percent of its exports to the United States, is a major producer of commodities, including oil. So its economy could be hurt by a slowdown in global growth.

Canadian factory sales fell by 1.3 percent in December from November on lower petroleum and coal product sales, Statistics Canada said. Analysts had forecast an increase of 0.2 percent.

"The surprising fall in factory activity will take Q4 GDP tracking forecasts below one percent," Royce Mendes, a senior economist at CIBC Capital Markets said in a research comment.

"Soft GDP prints to close out last year and begin this one will keep the Bank of Canada on the sidelines for at least the next few months," Mendes said.

The Bank of Canada has projected that growth slowed temporarily in the fourth quarter of 2018 and the first quarter of this year due mainly to lower oil prices. Money markets see chances of an interest rate hike this year at less than 20 percent.

US crude oil futures settled nearly one percent higher on Thursday at $54.41 a barrel. Still, oil has fallen nearly 30 percent since October.

At 4:09 p.m. (2109 GMT), the Canadian dollar was trading 0.3 percent lower at 1.3293 to the greenback, or 75.23 US cents. The currency touched its weakest level since Jan. 25 at 1.3340.

Canadian government bond prices were higher across the yield curve in sympathy with US Treasuries. The two-year rose 8.5 Canadian cents to yield 1.768 percent and the 10-year climbed 47 Canadian cents to yield 1.880 percent.