* C$ down at 85.51 U.S. cents
* Bond prices higher across curve as TSX tumbles (Adds details)
TORONTO, July 8 (Reuters) - The Canadian dollar erased early gains and fell to a seven-week low against the U.S. currency on Wednesday, as oil and equity prices slid on worries about the pace of economic growth.
The currency peaked at C$1.1587 to the U.S. dollar and then fell to C$1.1720, its lowest level since May 18, as a selloff in the resource-heavy Toronto Stock Exchange intensified amid tumbling commodity prices.
Toronto followed global markets lower as jitters about the economy hit financial markets and pushed the yen to six-week high against the greenback. [MKTS/GLOB]
"This is all related to global risk: the concept of whether we're getting better or not, and how quickly we will recover," said Firas Askari, head of foreign exchange trading BMO Capital Markets.
"There's still a lot of uncertainty and that's what it comes down to. Uncertainty is not great for markets."
At 1:22 p.m. (1722 GMT), the Canadian dollar was at C$1.1695 to the U.S. dollar, or 85.51 U.S. cents, down from C$1.1661 to the U.S. dollar, or 85.76 U.S. cents, at Tuesday's close.
Domestic bond prices were largely higher across the curve as money flowed into safer government debt, as well as following the bigger U.S. Treasury market, where debt prices were higher on Wednesday following an auction. [ID:nN08382724] (Reporting by Jennifer Kwan; editing by Rob Wilson)