Canada’s dollar was little changed as crude oil prices declined and U.S. lawmakers began voting on raising the country’s debt limit. The currency rose against nine of its 16 major peers. The loonie, as the currency is nicknamed, headed for a second straight monthly gain as economists predicted a Canadian government report tomorrow will show the country’s output expanded in May after stalling in April. “For the most part, the movements in the Canadian dollar have been tracking the movements in oil,” said Kathy Lien, director of currency research at the online trader GFT Forex in New York. “If Canada’s not benefiting from higher oil prices, then there’s nothing really to fall back on in an environment where the U.S. economy is in trouble both on a fiscal and monetary basis.” The Canadian currency traded at 94.93 cents per U.S. dollar by 5 p.m. in Toronto, compared with 94.98 yesterday. It has gained 1.5 percent this month, from 96.34 cents on June 30 and touched 94.07 cents on July 26, the strongest since Nov. 9, 2007. One Canadian dollar buys $1.0534. Policy Stance Bank of Canada policy makers on July 19 kept the benchmark policy rate at 1 percent and said borrowing costs will rise, omitting the word “eventually,” which had appeared in previous statements. “The optics for Canada are good,” said Jack Spitz, managing director of foreign exchange at National Bank of Canada, by phone from Toronto. “Investors are pricing in a rate increase between now and the end of the year, and that’s helping the Canadian dollar along.” Yields on two-year Government of Canada bonds rose one basis point to 1.48 percent, pushing the price of the 2 percent note due in August 2013 down 2 cents to C$101.02. The yield on the 10-year note was unchanged at 2.88 percent. Statistics Canada will report gross domestic product for May tomorrow. Economists predict output rose 0.l percent during the month, according to the median forecast in a Bloomberg survey of 24 economists. GDP was unchanged in April. Oil Prices Crude oil futures were little changed at $97.44 a barrel after gaining as much as 0.6 percent in New York. “Crude oil is still trading at the higher end of the recent range, and ultimately that continues to be a benefit to the loonie,” Spitz said. The U.S. House of Representatives began voting on a debt- limit increase proposal that confronts unified Democratic opposition in the Senate. House Speaker John Boehner of Ohio gained support among fellow Republicans for his plan to raise the debt ceiling after reworking the legislation to cut $917 billion over 10 years, more than his original approach. Treasury Secretary Timothy F. Geithner has said the U.S. will run out of options to prevent a default on Aug. 2 if the debt ceiling isn’t raised. Concern over the political and economic situation in the U.S. may weigh on the Canadian dollar until the end of trading tomorrow, according to a note today from analysts at Toronto- Dominion Bank’s TD Securities unit led by David Tulk, the firm’s chief Canada macro strategist. Second-quarter U.S. GDP, which will be released tomorrow, probably rose 1.8 percent at an annual rate, according to the median estimate in a Bloomberg survey of 84 economists. “External risks are a more significant as a driver” of the Canadian dollar, the TD Securities analysts said. “Soft U.S. growth prospects and worries about the U.S. fiscal situation suggest that, perhaps regardless of the tone of the Canadian data, the Canadian dollar will head into the weekend with a slightly weaker bias.” Canada’s dollar has weakened about 2.1 percent this year versus the currencies of nine other developed nations in the fourth-worst performance, according to Bloomberg Correlation- Weighted Currency Indexes. The greenback has fallen 7.4 percent and the Japanese yen is off 2.9 percent. To contact the reporter on this story: Frederic Tomesco in Montreal at tomesco@bloomberg.net. To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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