By Chris Fournier Dec. 5 (Bloomberg) -- Canada’s dollar fell below C$1.30 against its U.S. counterpart for the first time since October after a report showed the nation’s employment fell by the most since 1982, signaling the country may be entering a recession. The currency has lost 2.5 percent since Nov. 28 as the country’s prime minister took unprecedented measures to save his government and crude oil, which generates a tenth of exports, fell to the lowest in almost four years. There’s an “ugly mix of dynamics for the Canadian dollar,” said CIBC World Markets analyst Shane Enright in Toronto. “It’s obviously not good.” The Canadian dollar declined to C$1.2713 per U.S. dollar from C$1.2398 on Nov. 28. One Canadian dollar buys 78.66 U.S. cents. The currency, known as the loonie for the aquatic bird on the one-dollar coin, will fall to C$1.40 by the end of the first quarter next year, Enright predicts. The economy lost 70,600 jobs in November, Statistics Canada said today in Ottawa, almost triple the 25,000 economists had forecast, according to the median estimate of 21 analysts in a Bloomberg News survey. ‘Devastating Report’ “This is a devastating report and should compound recent weakness,” said Eric Lascelles, Toronto-based chief economics strategist at TD Securities Inc., a unit of Canada’s second- largest bank. The Canadian currency has lost 20 percent in six months as the global economic slowdown constrains demand for commodities such as crude oil, which plummeted 24 percent this week, and natural gas, which fell to the lowest in almost 15 months. Commodities generate a third of Canada’s export revenue. “The global backdrop is bearish for the Canadian dollar and domestic numbers are merely piling on,” said David Watt, a senior currency strategist at RBC Capital Markets in Toronto. “No one is looking for reasons to buy the Canadian dollar right now. They want reasons to sell.” The unemployment rate in Canada rose to 6.3 percent from 6.2 percent in October. Economists had forecast an increase to 6.4 percent. “The unemployment rate remains quite low and that is perhaps the most important point for the Bank of Canada in terms of policy,” said Shaun Osborne, chief currency strategist at TD Securities Inc. in Toronto. “The odds of a bigger rate cut might have slipped a little as a result of this report.” Canada’s central bank cut its overnight rate six times since December 2007 to 2.25 percent from 4.5 percent. Policy makers will cut the target rate by a half-percentage point to 1.75 percent at their next meeting on Dec. 9, according to the median forecast in a separate Bloomberg survey. Canadian Prime Minister Stephen Harper yesterday suspended Parliament until Jan. 26 to fend off an attempt by a coalition of opposition parties to oust him and his government. The coalition objects to Harper’s proposed measures for dealing with the financial crisis. To contact the reporter on this story: Chris Fournier in Montreal at cfournier3@bloomberg.net

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