Canada’s dollar weakened for a second day against its U.S. counterpart as global stocks declined and crude oil fell, diminishing the allure of commodity-linked currencies. “Risk aversion is dominating the currency landscape right now,” said Jack Spitz, managing director of foreign exchange at National Bank of Canada in Toronto. “The Canadian dollar historically does not perform well in terms of economic and financial uncertainty.” The Canadian currency, known as the loonie, weakened 0.8 percent to C$1.2523 per U.S. dollar at 8:25 a.m. in Toronto, from C$1.2421 on March 27, when it fell 0.9 percent. One Canadian dollar buys 79.85 U.S. cents. The MSCI World Index, a gauge of stocks in 23 developed nations, fell 1.5 percent as an Obama administration official said bankruptcy may be the best option for carmakers General Motors Corp. and Chrysler LLC and U.S. Treasury Secretary Timothy Geithner said some banks will need more government assistance. “Headlines on Chrysler and GM and the Geithner comments over the weekend contributed to risk aversion, which is supportive of the U.S. dollar and the Japanese yen,” said Spitz. “The Canadian dollar trades as a function of risk.” The greenback and the yen performed best among the most actively traded currencies. The New Zealand and Australian dollars, which like the Canadian dollar tend to trade in tandem with commodity prices, fell 1.3 percent and 1.9 percent, respectively, against the U.S. dollar. Crude oil futures for May dropped 2.8 percent to $50.94 a barrel. Canada’s currency will appreciate to C$1.24 against the U.S. dollar by the end of the year, according to the median forecast in a Bloomberg News survey of 40 economists. The yield on the two-year government bond fell two basis points, or 0.02 percentage points, to 1.03 percent. The 2.75 percent security due in December 2010 added 3 cents to C$102.83.

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