By Chris Fournier Nov. 12 (Bloomberg) -- Canada's currency dropped for a third day against its U.S. counterpart, the longest losing streak in three weeks, as oil fell to the lowest in 20 months. Canada's dollar, dubbed the loonie for the aquatic bird on the one-dollar coin, has weakened 13 percent this quarter, during which time crude has plunged 43 percent. Oil accounted for a tenth of Canada's export revenue last year. ``The ongoing slide in commodity prices, which doesn't seem to be showing any letup, is weighing most particularly on the Canadian dollar,'' said Doug Porter, deputy chief economist with BMO Capital Markets in Toronto, who predicts the Canadian currency will weaken to C$1.25 by year-end. The Canadian currency fell as much as 1 percent to C$1.2205 versus the U.S. dollar, the lowest since Oct. 31, from C$1.2073 yesterday. It traded at C$1.2203 at 10:15 a.m. in Toronto. One Canadian dollar buys 81.85 U.S. cents. The currency declined during four days in the period ended Oct. 22. Crude for December delivery touched $57.04 a barrel in electronic trading on the New York Mercantile Exchange, the lowest since March 20, 2007. Prices have tumbled 61 percent since reaching a record $147.27 on July 11. `Lose Altitude' ``Oil prices are below $60 while longer-term oil price futures are also continuing to lose altitude,'' said David Watt, a senior currency strategist at RBC Capital Markets in Toronto. ``The global backdrop that sparked the October moves has not changed and is again weighing on commodity and cyclically sensitive currencies.'' Brazil's real lost 0.8 percent against the loonie, while Mexico's peso declined 0.4 percent. Energy companies are scaling back development of Canadian oil sands, the world's biggest energy reserves outside Saudi Arabia. The Canadian Association of Petroleum Producers cut its forecast for spending next year by 20 percent to C$16 billion ($13.1 billion). Oil-sands projects will be profitable if crude is priced at $95 to $100 per barrel in coming decades, New York-based Deutsche Bank AG analyst Ryan Todd said in an interview. ``Sub-$60 crude is the dominant influence pushing the loonie weaker this morning,'' said Jack Spitz, managing director of foreign exchange at National Bank of Canada in Toronto. ``An overall bias to be short risk is also playing into it from a global currency landscape perspective.'' The World Bank cut its forecast for growth in developing countries to 4.5 percent in 2009 from a June projection of 6.4 percent. Growth in high-income countries will shrink 0.1 percent next year, compared with a 1.4 percent increase in 2008, the Washington-based lender said in a statement yesterday. Encourage New Loans Canadian Finance Minister Jim Flaherty plans to triple the amount of mortgages the government may buy from banks to as much as C$75 billion to encourage new loans, he told reporters today in Toronto. The yield on two-year government securities fell 3 basis points, or 0.03 percentage point, to 1.90 percent. The price of the 2.75 percent security due in December 2010 rose 5 cents to C$101.71. The yield on the 10-year note declined 4 basis points to 3.68 percent. The price of the 4.25 percent security maturing in June 2018 climbed 30 cents to C$104.57. To contact the reporter on this story: Chris Fournier in Montreal at cfournier3@bloomberg.net

Source