Canada’s currency weakened as crude oil, the country’s biggest export, declined. ‘The Canadian dollar, along with the other commodity dollars, faces a very strong headwind,” said Boris Schlossberg, director of currency research with online currency trader GFT Forex, in New York. “The market is having very serious doubts about whether the global economy is going to be able to recover.” The Canadian currency, known as the loonie, dropped 1 percent to C$1.1971 per U.S. dollar at 9:30 a.m. in Toronto, from C$1.1853 on Jan. 9. One Canadian dollar buys 83.53 U.S. cents. Crude oil for February delivery declined as much as $2.71, or 6.6 percent, to $38.12 a barrel on concern the economic slump will damage demand. Crude, the largest component of the Bank of Canada’s Commodity Price Index, accounting for 21 percent of the gauge, touched a record $147.27 a barrel on July 11. The loonie fell 18 percent against the U.S. dollar in 2008, the biggest annual decline since at least 1972, the start of Bloomberg data. The global recession cut demand for commodities, which account for about half of Canada’s export revenue. Canada’s currency will slip to C$1.25 against the U.S. dollar by the end of the first quarter, according to the median forecast in a Bloomberg News survey of 34 economists. The yield on the two-year government bond was little changed at 1.09 percent. The price of the 2.75 percent security due in December 2010 fell 1 cent to C$103.07.

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