By Chris Fournier Oct. 9 (Bloomberg) -- Canada's currency dropped to the lowest since April 2007 as crude oil declined. The currency has depreciated 5.8 percent so far this week following a fall of 4.5 percent during the period through Oct. 3, which was the biggest weekly loss since at least January 1971 when Bloomberg records begin. Canada relies on commodities for about half its export revenue. The U.S. is Canada's largest trading partner. ``Crude is pretty much back at the lows again and that's not helping,'' said Adam Cole, head of global currency strategy in London at RBC Capital Markets. ``There's been so much talk about global recession given what's been happening in the market recently. It's throwing the focus back on Canada's very cyclical currency.'' Cole's long-term forecast is for the Canadian dollar to trade at C$1.15 against the U.S. dollar. The Canadian dollar weakened as much as 2 percent to C$1.1508 per U.S. dollar, from C$1.1281 yesterday, the weakest since April 10, 2007. It traded at C$1.1473 at 11:10 a.m. in Toronto. One Canadian dollar buys 87.15 U.S. cents. Global growth is headed for a ``major downturn'' next year, the International Monetary Fund said in a report this week. The world's advanced economies next year will grow at the slowest pace since 1982, the IMF said. Crude Oil Crude oil for November delivery fell 1.7 percent to $87.40 a barrel on the New York Mercantile Exchange. Futures touched $86.05 yesterday, the lowest since Dec. 6. The contract has lost more than 40 percent from the record $147.27 a barrel reached on July 11. The Canadian dollar has weakened by 11.3 percent since then. Crude accounts for 21 percent of the weighting in the Bank of Canada Commodity Price Index, the largest single component. The Bank of Canada will lower its key interest rate by another percentage point to 1.5 percent by its Jan. 20 meeting, said Jonathan Basile, an economist at Credit Suisse Holdings Inc. in New York. Canada's central bank will lower the rate by half a point at its next meeting on Oct. 21, then a quarter of a point each at decisions on Dec. 9 and Jan. 20, Basile said today. ``The deterioration in U.S. demand is likely to have a spillover effect for important export sectors in Canada like the auto sector,'' he said by telephone. ``It's likely to generate more weakness in Canada in particular on the consumer side and on the business side.'' The Bank of Canada unexpectedly cut its key rate to 2.5 percent from 3 percent yesterday as part of a coordinated effort to ease the economic effects of the worst financial crisis since the Great Depression. Canada's economy is sinking into recession, Basile said, and will contract this quarter and next. To contact the reporter on this story: Chris Fournier in Montreal at cfournier3@bloomberg.net

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