The Canadian dollar fell to its lowest level since April 2003 on Thursday as oil prices extended losses, while the Indonesian rupiah slipped after militant attacks in Jakarta.

The rupiah fell about 1 per cent against the dollar at one point to as low as 13,960 after several explosions and gunfire were heard in the centre of the Indonesian capital, witnesses told Reuters.

While the initial reaction among major currencies was relatively limited, market participants said this could add to the risk averse sentiment in the market, which has been roiled this month by renewed concerns about China’s economic health and the outlook for global growth.

“If this turns out to be something that has occurred on a very large-scale, equities could fall and spur buying of the dollar, as well as the yen,’’ said Satoshi Okagawa, senior global markets analyst for Sumitomo Mitsui Banking Corporation in Singapore.

The dollar was last down 0.2 per cent on the day at 117.47 yen.

Yen tends to gain

The low-yielding yen tends to gain in times of market stress as it is often used as a funding currency for investment in risk assets, and consequently can rise when there is a retreat from such assets.

The euro edged up 0.1 per cent on the day to $1.0888.

Canadian dollar, sterling

The Canadian dollar slipped to as low as C$1.4382 per US dollar.

Investors have taken aim at the loonie after Brent crude dipped below $30 a barrel on Wednesday for the first time since April 2004, fuelling speculation the Bank of Canada could cut interest rates as early as next week.

Brent crude extended its losses in Asian trade on Thursday and marked another 12-year low.

BOE policy meet

The market gave sterling a wide berth even though the consensus is for the BOE to leave interest rates on hold at its first monetary policy decision of the year on Thursday.

Some investors suspect the central bank may sound more dovish given the uncertain global backdrop.

Sterling eased 0.1 per cent to $1.4398. Earlier this week, it fell to $1.4352, its lowest level since June 2010.

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