Canada’s dollar dropped for a second day and extended its weekly decline as a government report showed employers unexpectedly cut jobs in August for the first time in five months. “It’s not the best news,” said David Watt, senior currency strategist at Royal Bank of Canada’s RBC Capital Markets, by phone from Toronto. “We’re still anticipating a move toward parity.” The currency, nicknamed the loonie for the image of the aquatic bird on the C$1 coin, depreciated 0.3 percent to 99.26 cents per U.S. dollar at 7:25 a.m. in Toronto, from 98.95 cents yesterday. One Canadian dollar buys $1.0075. The currency last traded on a one-for-one basis with the greenback Aug. 9. Payrolls decreased by a net 5,500 jobs in August after an addition of 7,100 jobs in the previous month, Statistics Canada reported today. The median forecast of 22 economists in a Bloomberg News survey was for a gain of 21,500. The unemployment rate rose to 7.3 percent. The loonie touched the weakest level in a month on Aug. 5, when the government reported that the economy gained fewer than half the jobs economists had projected. The Canadian dollar fell and government bonds rose yesterday, pushing 10-year note yields to the lowest level since at least 1989, as investors sought safety on concern the global economic slowdown is getting worse. Growth Outlook The Organization for Economic Cooperation and Development cut its growth forecasts yesterday. The U.S., Canada’s biggest trade partner, will expand 1.1 percent in the third quarter and 0.4 percent in the fourth quarter, instead of the 2.9 percent and 3 percent increases predicted in May, the Paris-based group said yesterday in an interim assessment. Canada’s gross domestic product fell at a 0.4 percent annualized rate in the second quarter, the nation’s statistics agency reported Aug. 31. Employers in the U.S. added zero jobs last month, the government payrolls report showed last week. It was the weakest reading of the data since September 2010. The Bank of Canada held its target rate for overnight lending between commercial banks this week at 1 percent, where it has been for a year. The central bank said there is less need for a rate increase as Europe’s sovereign-debt crisis and a slow U.S. economic rebound hobble the global recovery. The Bank of Canada reiterated that it expects economic growth to resume in the second half of this year, led by business investment and consumer spending. To contact the reporter for this story: Chris Fournier in Halifax, Nova Scotia, at cfournier3@bloomberg.net To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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