Canada’s dollar weakened as its U.S. counterpart strengthened against most major currencies on speculation President-elect Barack Obama’s fiscal stimulus plan may lift the U.S. economy out of recession. “There’s a perception that this broad U.S. dollar rally is based on a little bit of hope about the U.S. economic situation,” said Steven Barrow, head of G-10 currency research in London at Standard Bank Plc. There are “more details leaking out about Obama’s stimulus package.” The Canadian dollar dropped 0.7 percent to C$1.2136 per U.S. dollar at 8:19 a.m. in Toronto, from C$1.2050 on Jan. 2. One Canadian dollar buys 82.40 U.S. cents. Barrow predicts the Canadian dollar will depreciate to C$1.30. The U.S. dollar advanced against all but two of the 16 most actively traded currencies, with South Korea’s won and Mexico’s peso the exceptions. Canada’s currency will slip to C$1.28 against the U.S. dollar by the end of the first quarter, according to the median forecast in a Bloomberg News survey of 36 economists. Obama, who takes office on Jan. 20, plans to seek Congressional approval in coming weeks for an economic stimulus plan that may total $775 billion, according to a transition official and Democratic aides. Tax cuts may account for 40 percent of the package, they said.

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