TORONTO (Dow Jones)--The U.S. dollar, broadly weaker in the market, sank to fresh multiyear lows against its Canadian rival overnight, trading at levels not seen since November 2007. The U.S. dollar is at C$0.9677, down from C$0.9715 late Tuesday, according to data provider CQG. It broke through a narrow six-day trading range overnight, touching a low of C$0.9666. "It's difficult to comment on a moving target, as USD/CAD has been sinking since we walked in the door this morning, being pulled lower by a broadly weaker USD," said TD Securities in Toronto. The greenback has been under pressure in recent sessions amid threats that surging oil prices could dampen the U.S. recovery, and further weighed by the likelihood for a sustained period of low interest rates. News Tuesday that Walter Energy's takeover of Western Coal had received shareholder approval might also be helping to hold the U.S dollar lower against the Canadian unit, said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto. The cash-and-stock deal, announced in December, is valued at $3.3 billion. TD said the move looks "overdone," at least based on interest rate spreads, with Canada-US spreads well off the highs reached in late last year and early this year. However, it said, the U.S. dollar could continue to sink against its Canadian rival Wednesday, "with only small bids" below the current trading level standing in the way. Crude futures were up slightly Wednesday, as clashes continued between pro-democracy rebels and forces loyal to Libyan leader Moammar Gadhafi. Giant plumes of black smoke were seen near Es Sider oil terminal in east Libya on Wednesday after Gaddafi's forces launched a heavy bombardment on rebel troops, Reuters reported. About 1 million barrels a day of the country's oil production have been shut down, and little crude is being exported. Uprisings in Libya, and in other points throughout the Middle East and North Africa, have sent oil prices rising, a trend that has helped underpin strength in the commodity-linked Canadian dollar. The currency was little changed on data Wednesday, as Canada's new house price index for January showed a monthly increase that beat expectations, and a monthly increase that matched them. Investors await Canada's merchandise trade balance data for January, due on Thursday, and its key employment report, due on Friday. -By Karen Johnson, Dow Jones Newswires; 416-306-2022; karen.johnson@dowjones.com

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