* C$ hits five week low as oil price retreats
* U.S. housing data disappoints (Updates with details)
TORONTO, June 23 (Reuters) - The Canadian dollar fell to its lowest level in five weeks against the U.S. currency on Tuesday as see-sawing oil prices and equity markets cut early gains and pulled back the commodity-linked currency.
The Canadian dollar was also pressured by data showing sales of previously owned homes in the United States rose at a slower than expected pace in May, pointing to a sluggish recovery from the recession. [ID:nN23475172]
Bonds trimmed early losses as the soft U.S. economic data drew investors back to their relative safety.
"There was some disappointment in terms of the U.S. housing numbers. They've added a bit more concern in terms of how the U.S. and global economy is going to rebound," said Paul Ferley, assistant chief economist at Royal Bank of Canada.
In response, the Canadian dollar fell as low as C$1.1583 to the U.S. dollar, or 86.33 U.S. cents, its lowest level against the greenback in five weeks, before recovering a bit.
At 12:05 p.m. (1605 GMT), the currency was at C$1.1545 to the U.S. dollar, or 86.62 U.S. cents, down from C$1.1526 to the U.S. dollar, or 86.76 U.S. cents, at Monday's close.
The price of oil, a key Canadian export, fell back below $68 a barrel, after early gains helped lift the currency. Crude's retreat also steered Toronto's resource-heavy main stock index lower. [ID:nN23548199] U.S. stocks also erased morning gains. [ID:nN233372]
BONDS PARE LOSSES
Meanwhile, Canadian bond prices pared losses, in line with their U.S. counterparts [ID:nN23547243], as early risk appetite waned and as the U.S. data suggested a slower than expected recovery from the economic downturn.
The benchmark two-year government bond dipped 2 Canadian cents to C$100.02 to yield 1.242 percent, while the 10-year bond fell 3 Canadian cents to C$102.62 to yield 3.436 percent.
The 30-year bond was unchanged at C$118.50 to yield 3.906 percent. The comparable U.S. issue yielded 4.377 percent.
With a dearth of economic data in Canada, focus turned to the two-day U.S. Federal Reserve policy meeting that began on Tuesday.
The market will be watching to see the U.S. central bank's economic outlook and for further details on its debt buying program. (Reporting by Ka Yan Ng; editing by Rob Wilson)