The Canadian dollar traded near a two-month low versus the greenback after weaker-than-forecast data last week on U.S. jobs and manufacturing spurred concern the recovery of Canada’s biggest trade partner is faltering. The loonie, as the currency is nicknamed for the image of the aquatic bird on the C$1 coin, pared its loss after the Ivey purchasing managers index increased more than projected in May. Crude oil, Canada’s biggest export, and stocks declined. “Canada’s a little weak today, really just suffering on back of the earlier events from last week -- a deterioration of U.S. data,” said Camilla Sutton, chief currency strategist at Bank of Nova Scotia’s Scotia Capital unit in Toronto. “As the outlook softens for the U.S., it also softens for Canada.” The Canadian currency fell for a second day, depreciating 0.1 percent to 97.90 cents per U.S. dollar at 11:15 a.m. in Toronto, from 97.78 cents on June 3, when it touched 98.52 cents, the weakest level since March 21. Earlier today it reached 98.17 cents. One Canadian dollar buys $1.0215. The purchasing managers’ index rose to 65.5 in May on a seasonally adjusted basis, according to a statement on the University of Western Ontario business school’s website today, after an adjusted reading of 57.8 in April. The median estimate in a Bloomberg News survey was 55.2. Readings of more than 50 indicated purchasing by governments and companies advanced. ‘Rather Unique’ “This morning’s Ivey PMI report suggests that the recovery in Canada could be gaining momentum,” Kathy Lien, director of foreign-exchange research at online currency trader GFT Forex in New York, wrote to clients today. “The increase in production is rather unique, considering that many countries reported slower manufacturing activity in May.” Canadian building permits fell in April at the fastest pace in more than five years, Statistics Canada said earlier today, dropping 21.1 percent to a seasonally adjusted C$5.35 billion ($5.45 billion). Canada’s currency fell over the past month against all of its 16 most-traded counterparts, declining 1.3 percent against the U.S. dollar. The loonie declined today the most against the yen, falling 0.3 percent to 81.90, from 82.16 yen on June 3. The Canadian dollar gained 0.1 percent against the euro to C$1.4304. Crude oil for July delivery declined 1 percent to $99.20 a barrel in New York after slipping 0.4 percent last week. The Standard & Poor’s 500 Index fell 0.4 percent. Finance Minister Jim Flaherty, whose Conservative Party won a majority in last month’s election, is scheduled to issue a 2011 budget at around 4 p.m. New York time. The plan will make only “modest” changes to one presented on March 22 that didn’t pass Parliament. Bonds Fall Government bonds fell, pushing the yield on Canada’s 10- year note up two basis points to 3.01 percent. It touched 2.95 percent on June 3, the lowest level since November. One basis point is 0.01 percentage point. The price of the 3.25 percent security due in June 2021 decreased 18 cents to C$102.07. The government will sell C$1.4 billion of 30-year bonds on June 8, according to a statement on the Bank of Canada’s website. The securities mature in December 2045. The Canadian currency fell 2.4 percent in May against the U.S. dollar, the first monthly drop since January and the biggest since August, amid concern a weak U.S. economic recovery will prompt the central bank to delay interest-rate increases. U.S. payrolls increased by 54,000 jobs in May, less than a third of the 165,000 that economists had projected, Labor Department data showed last week. An Institute for Supply Management report on June 1 showed manufacturing in the nation grew at the slowest pace in more than a year. Canada ships about three-quarters of its exports to the U.S. Employment growth in Canada slowed in May, a Statistics Canada report may show on June 10. Employers added a net 20,000 jobs after a gain of 58,300 in April, according to the median estimate in a Bloomberg survey. To contact the reporter on this story: Cecile Vannucci in New York at cvannucci1@bloomberg.net. To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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