Canada's oil reserves helped buoy the country's currency during four years of financial-market turmoil.

Now, those oil supplies, Canada's biggest export, are becoming a liability for the Canadian dollar, investors said, even as crude prices globally have stayed high.

The crux of the issue: The boom in U.S. oil output has caused a glut in North America, driving down prices of Canadian crude. Sharply lower oil revenue is darkening the outlook for Canada's economy and worsening the country's trade deficit. The combination of these factors is weighing on the Canadian dollar, investors and analysts said.

Crude oil from Western Canada's oil sands, the country's main producing region, sells for about $65 a barrel, compared with $115 a barrel for oil traded on international markets and $97 in the U.S. Canadian oil's $50 discount to Brent, the benchmark for world oil prices, is nearly a record.

The recent performance of the Canadian dollar, also called the "loonie," stands in contrast to the performance of other currencies that tend to move in tandem with oil prices. The loonie is down 0.5% against the U.S. dollar this year and last week hit a five-month low, while Norway's krone and the Russian ruble are both up 1.8%. On Thursday, one U.S. dollar bought 0.9972 Canadian dollar, down from C$1.0012 late Wednesday.