By Chris Fournier Oct. 14 (Bloomberg) -- Canada's currency weakened against the U.S. dollar as the price of crude oil fell on concern that coordinated measures by governments won't be enough to avert a global recession. The Canadian dollar has declined 13 percent since July 11 when oil reached a record $147.27 a barrel. Crude has fallen 47 percent since then. Commodities account for about half of Canada's export revenue. The U.S. is Canada's largest trading partner. ``There are continuing worries about how much world growth will slow down, and as a result oil prices are lower,'' said Kate Warne, a market strategist with Edward Jones & Co. in St. Louis. ``If we see commodity prices continue to decline, then we're likely to see a weaker Canadian dollar.'' The Canadian dollar fell as much as 1.2 percent to C$1.1617 per U.S. dollar, from C$1.1475 yesterday. The currency last traded at C$1.1612 at 3:10 p.m. in Toronto after earlier climbing as much as 1.5 percent. The Canadian dollar, known as the loonie because of the aquatic bird on the one-dollar coin, buys 86.13 U.S. cents. Canada's currency will trade at C$1.13 against the U.S. dollar by the end of 2009, according to the median forecast in a Bloomberg News survey of economists. The U.S. government's plan to inject cash into financial institutions coincides with similar actions by countries around the world. `Downward Pressure' ``People are waiting for some clarity in terms of how successful the initiatives over the weekend will be in calming down the pressure in financial markets,'' said Paul Ferley, assistant chief economist at Royal Bank of Canada, the country's biggest lender by assets, in Toronto. ``You're getting some downward pressure on the loonie with oil prices weakening.'' Ferley predicts the currency will reach C$1.15 by the end of next year. Crude oil for November delivery fell as much as 3.6 percent to $78.31 a barrel. Crude accounts for 21 percent of the weighting in the Bank of Canada Commodity Price Index, the largest single component. Yields on Canadian bonds rose on concern governments will have to flood the market with debt to pay for their rescue initiatives. The yield on the two-year government security rose as much as 14 basis points, or 0.14 percentage point, to 2.37 percent, from 2.23 percent yesterday, the third straight gain. It last traded at 2.32 percent. The price of the 2.75 percent security due in December 2010 fell 19 cents to C$100.93. `Trillions of Dollars' ``It's supply jitters,'' said Michael Gregory, senior economist at BMO Capital Markets in Toronto. ``It's hard for markets to get around the fact that we're talking trillions and trillions of dollars. That's massive amounts of issuance.'' The Canadian government on Oct. 10 moved to shore up the nation's banks by taking on some of their mortgages in a bid to ease higher borrowing costs that have crippled lending. The 10-year note's yield rose 1 basis point to 3.80 percent. The price of the 4.25 percent security maturing in June 2018 slipped 7 cents to C$103.58. The 10-year bond yielded 148 basis points more than the two- year security, down from 157 basis points yesterday. The two-year bond's yield will rise to 2.78 percent by the end of this year, while the 10-year bond's yield will drop to 3.79 percent, according to the median forecasts of economists surveyed by Bloomberg News. Canadian government bonds have returned 4 percent in 2008, according to Merrill Lynch & Co. index statistics. U.S. Treasuries have returned 5.1 percent this year. To contact the reporter on this story: Chris Fournier in Montreal at cfournier3@bloomberg.net

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