Canada’s dollar fell against its U.S. counterpart as concern mounted that Europe’s most indebted nations may be forced to reorganize debt payments to bondholders, damping demand for currencies linked to growth. The loonie, as the currency is nicknamed, declined against most of its major peers after German Finance Minister Wolfgang Schaeuble told Die Welt newspaper that Greece may need to negotiate with creditors should an audit in June question its ability to make debt repayments. Portuguese and Greek bonds slumped, driving yields to record highs. “Risk is just coming off, mostly due to Europe,” said Blake Jespersen, director of foreign exchange in Toronto at Bank of Montreal. “This should have been the focus for the last little while and it only seems to be raising its ugly head this morning.” The loonie weakened 0.3 percent to 96.50 cents per U.S. dollar at 8:33 a.m. in Toronto, the weakest level since April 5. One Canadian dollar buys $1.0363. Canadian factory sales fell three times faster than economists predicted in February in a widespread decline led by lower automobile production. Sales fell 1.5 percent to C$47.1 billion ($48.8 billion), the largest drop since August 2009, Statistics Canada said today in Ottawa. Economists in a Bloomberg News survey predicted a 0.5 percent decrease, based on the median of 21 estimates. To contact the reporter for this story: John Detrixhe in New York at jdetrixhe1@bloomberg.net To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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