By Mary Childs and Chris Fournier June 4 (Bloomberg) -- The Canadian currency fell for a second day as volatility in global foreign-exchange markets offset a government report that showed employers added 24,700 jobs last month. After an initial gain, the Canadian dollar weakened against its U.S. counterpart as the Swiss franc strengthened through 1.40 per euro for the first time. The euro weakened to less than $1.21 for the first time since April 2006. “The rising bond yields and CDS levels in Europe is a real concern, highlighting that there still is ongoing trouble in Europe,” said Camilla Sutton, director of currency strategy in Toronto at Bank of Nova Scotia, Canada’s third-largest lender. “That’s the key driver today.” The Canadian dollar fell 0.3 percent to $1.0435 per U.S. dollar at 7:14 a.m. in Toronto, from C$1.0402 yesterday. One Canadian dollar buys 95.83 U.S. cents. Canada’s currency had gained 1.5 percent since June 1, when the Bank of Canada raised its target lending rate by a quarter- percentage point to 0.5 percent, becoming the first Group of Seven central bank to increase borrowing costs since July 2008. Governor Mark Carney indicated future increases may be delayed as a result of Europe’s sovereign-debt crisis. The economy 24,700 jobs in May after an increase of 108,700 in the previous month, Statistics Canada said today in Ottawa. The median forecast of 19 economists in a Bloomberg News survey was for an increase of 15,000. Canada’s unemployment rate was unchanged at 8.1 percent. The currency touched C$1.0853 on May 25, the weakest level since November, as investors sold higher-yielding assets such as stocks and commodities on speculation Europe’s fiscal turmoil may hamper economic growth. The loonie is still the second-best performing currency this year after the Mexican peso among the U.S. dollar’s 16 most-traded counterparts. Bank of Canada policy makers will increase the target rate for overnight lending between commercial banks to 1.50 percent by the end of this year, according to the median forecast in a Bloomberg News survey of 11 economists. To contact the reporter on this story: Chris Fournier in Montreal at cfournier3@bloomberg.net

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