By Mary Childs and Chris Fournier May 21 (Bloomberg) -- Canada’s dollar dropped to a three- month low as concern Europe’s sovereign-debt crisis will undermine the global recovery reduced demand for currencies related to economic growth. The currency was headed for the biggest weekly drop in more than a year even as a Statistics Canada report released less than two weeks before the central bank’s June 1 policy meeting showed annual inflation accelerated last month more than economists forecast. “There was some consensus on the street that this number would need to be more decisive in order to influence the Bank of Canada,’’ said Jack Spitz, managing director of foreign exchange at National Bank of Canada in Toronto. “It continues to remain uncertain over whether the Bank of Canada goes on June 1. Much of that indecision comes from factors beyond Canada’s borders.” Canada’s dollar, nicknamed the loonie for the image of the aquatic bird on the C$1 coin, declined 0.3 percent to C$1.0731 per U.S. dollar at 7:43 a.m. in Toronto, from C$1.0702 yesterday. It touched C$1.0751, the weakest level since Feb. 9. One Canadian dollar buys 93.19 U.S. cents. European finance ministers were scheduled to meet for the fifth time in as many weeks as they struggle to forge a united front to the debt crisis triggered by Greece. Today in Brussels, the officials will discuss proposals to better coordinate national budgets and may address unilateral German limits on government bond trading. German lawmakers approved their nation’s share of an almost $1 trillion euro-region bailout in a vote today. German Vote The lower house of parliament voted 319 to 73 in favor of lending as much as 148 billion euros ($184 billion) to indebted European states to backstop the euro. The upper house, or Bundesrat, is set to pass the measure later today before the German president signs it into law. The euro rose for a third day against the Canadian dollar, trading at C$1.3418 after reaching C$1.2650 on May 18, the lowest level since July 2001. Bank of Canada Governor Mark Carney said last month that policy makers will start raising the target lending rate because of faster-than-expected inflation and economic growth after dropping a “conditional commitment” to keep the rate unchanged at a record low 0.25 percent. Policy makers’ next two decisions on interest rates are scheduled for June 1 and July 20. --Editor: Dennis Fitzgerald, Dave Liedtka To contact the reporters on this story: Mary Childs in New York at mchilds5@bloomberg.net; Chris Fournier in Montreal at cfournier3@bloomberg.net To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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