Canada’s currency fell as concerns over the severity of the global recession increased investor aversion to the currencies of countries dependent on commodity demand for economic growth. The U.S. dollar strengthened against all but three of the 16 most actively traded currencies following reports Russian banks asked the government to moderate talks with foreign creditors on $400 billion of loans. A Finance Ministry official who declined to be named said in an interview with Bloomberg News that the Russian government isn’t planning to restructure corporate foreign debt and isn’t in talks with foreign banks on restructuring. “Overnight was very messy with the Russia story giving the U.S. dollar a lift,” said Steven Butler, director of foreign- exchange trading in Toronto at Scotia Capital, a unit of Canada’s third-largest bank. “Expect some wild swings as we digest the day’s events.” The Canadian dollar fell 0.5 percent to C$1.2225 per U.S. dollar at 7:27 a.m. in Toronto, from C$1.2174 yesterday. One Canadian dollar buys 81.80 U.S. cents. U.S. Treasury Secretary Timothy Geithner today is expected to announce an overhaul of the bank-bailout fund. The new plan is designed to support about $1.5 trillion in new lending and handling of distressed assets. Canada’s currency will weaken to C$1.25 against the U.S. dollar by the end of March before rebounding to C$1.20 by year- end, according to the median forecast in a Bloomberg News survey of 44 economists.

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