Canada’s dollar declined the most in almost two months as commodities including gold, nickel and oil fell, reducing the currency’s appeal. “The price of crude is down below the psychological level of $40; gold is faltering,” said Jack Spitz, managing director of foreign exchange at National Bank of Canada in Toronto. “It looks like all the factors are lining up for Canadian dollar weakness going forward.” The Canadian currency dropped 2.8 percent, the most since Nov. 20, when Prime Minister Stephen Harper said he planned measures to stimulate the economy, to C$1.2189 per U.S. dollar at 4:49 p.m. in Toronto. It was C$1.1853 on Jan. 9. It touched C$1.2199 today, the weakest level since Jan. 5. One Canadian dollar buys 82.04 U.S. cents. Crude oil for February delivery dropped as much as 8.2 percent to $37.48 a barrel on concern the economic slump will damage demand. Crude, the largest component of the Bank of Canada’s Commodity Price Index, accounting for 21 percent of the gauge, touched a record $147.27 a barrel on July 11. “It’s one of the key exports, so $50 oil would clearly help the Canadian dollar out, but so far we don’t see that happening,” said Boris Schlossberg, director of currency research at online foreign-exchange trader GFT Forex in New York. Gold futures for February delivery closed at $821.90 an ounce, a decline of 4 percent, after touching $815.10 an ounce, on the Comex division of the New York Mercantile Exchange. Nickel for delivery in three months fell 12 percent to $10,642 a metric ton. Factors ‘Conspiring’ Oil has plunged 75 percent from the record in July, while gold has declined 22 percent from the all-time high in March. “The factors are all conspiring for safe-haven flows, which are not to the benefit of the Canadian dollar,” Spitz said. Canada’s currency, known as the loonie, fell 18 percent against the U.S. dollar in 2008, the biggest annual decline since at least 1972, the start of Bloomberg data. The global recession cut demand for commodities, which account for about half of Canada’s export revenue. The loonie will slip to C$1.25 against the U.S. dollar by the end of the first quarter, according to the median forecast in a Bloomberg News survey of 34 economists. Canadian companies face the worst prospects for obtaining loans or making new sales in a decade, according to executives surveyed by the Band of Canada. Borrowing terms are the tightest since at least 1999, with senior credit officers who reported less willingness to extend loans outnumbering those who said credit was easier to access by 76 percentage points, according to a survey by the Ottawa-based central bank. The yield on the two-year government bond fell six basis points, or 0.06 percentage point, to 1.03 percent. The price of the 2.75 percent security due in December 2010 increased 11 cents to C$103.19.

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