By Chris Fournier Dec. 3 (Bloomberg) -- Canada’s currency depreciated against its U.S. counterpart as stock markets in Europe fell and the prime minister threatened to suspend Parliament to stave off defeat at the hands of a united opposition. “Weakness in the Canadian dollar corresponds to weakness in equities,” said Sebastien Galy, a currency strategist at BNP Paribas Securities SA in New York. “The political noise is also adding a little bit to the drop in the currency.” The Canadian dollar dropped as much as 0.9 percent to C$1.2570 per U.S. dollar, from C$1.2463 yesterday. It traded at C$1.2560 at 7:55 a.m. in Toronto. One Canadian dollar buys 79.60 U.S. cents. BNP Paribas predicts the Canadian dollar will weaken to C$1.33 by year-end. Europe’s Dow Jones Stoxx 600 Index lost 0.8 percent to 195.58, extending this year’s retreat to 46 percent. U.S. equity- index futures also weakened, indicating the Standard & Poor’s 500 Index may fall at the open. Canadian Prime Minister Stephen Harper may suspend Parliament after the main opposition Liberal Party agreed two days ago to form a coalition with the New Democratic Party that would be backed by the separatist Bloc Quebecois during key votes. The alliance may replace Harper’s Conservative Party government as early as next week. The coalition proposal requires the backing of the country’s head of state, Governor General Michaelle Jean, who returns to Canada today after cutting short a state visit to central Europe. Should she refuse the request to let the coalition govern, the country would be forced into its fourth election since 2004. To contact the reporter on this story: Chris Fournier in Montreal at cfournier3@bloomberg.net

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