* C$ falls nearly a penny, pares losses
* Oil, other commodity price slide sparks similar C$ move
* C$ at C$0.9655 to the U.S. dollar, or $1.0357
* Bond prices mildly firmer
By Ka Yan Ng
TORONTO, May 5 (Reuters) - The commodity-linked Canadian dollar was yanked to its lowest in more than two weeks against the U.S. currency on Thursday, extending its recent slide on sharply lower oil prices.
The sell-off in oil followed bearish inventory data from the United States on Wednesday and discouraging economic data, but the real selling kicked in when Brent crude futures crashed through an important technical level of $120 a barrel.
U.S. crude was also on a steep decline, as were other commodity markets such as copper and silver. North American equity futures pointed to a lower open.
The Canadian dollar, which traded in a modest 30-point range overnight, tracked the price of oil sharply lower, diving nearly a penny from the previous session's close. It fell as low as C$0.9675 to the U.S. dollar, or $1.0336, it lowest since April 18.
At 8:10 a.m. (1210 GMT), the Canadian dollar CAD=D4 had pared losses to stand at C$0.9655 to the U.S. dollar, or $1.0357, down from Wednesday's North American session finish at C$0.9585 to the U.S. dollar, or $1.0433.
"We're seeing a broad-based move in risk aversion right across markets, led by commodities," said Camilla Sutton, chief currency strategist at Scotia Capital.
Minor Canadian economic indicators on Thursday, building permits for March and the Ivey Purchasing Managers Index for April, were likely to be overshadowed by the broader sell-off in riskier assets.
Traders are on guard for Friday's slate of important April employment reports from the United States and Canada.
Market players in both the currency and bond markets were also focused on European Central Bank President Jean-Claude Trichet to see if he will point to a rate rise in June by mentioning "strong vigilance" in a news conference to be held later in the session.
Canada's interest rates are also set to rise sometime this year, although estimates on the timing has left the market somewhat divided.
Investors have fully priced in an interest rate hike for October, according to a Reuters calculation of yields on overnight index swaps. An interest rate poll of primary dealers on April 19 showed more primary dealers expect a rate hike in July. [CA/POLL] BOCWATCH
Canadian government bond prices were mildly firmer on Thursday as stock futures suggested a weaker open, while the key jobs figures loomed and kept price movements minimal.
The two-year bond CA2YT=RR was up 2 Canadian cents to yield 1.675 percent, while the 10-year bond CA10YT=RR rallied 17 Canadian cents to yield 3.195 percent.
(Editing by Padraic Cassidy)