Canada’s dollar headed for the biggest weekly decline since February on concern global economic growth won’t resume soon, damping demand for commodity-linked currencies. The currency was little changed after falling as much as 0.7 percent as reports showed Europe’s economy contracted at the fastest pace in at least 13 years in the first quarter and New Zealand’s retail sales tumbled. It erased losses after reports showed U.S. industrial production and New York area manufacturing declined less than economists expected, reducing demand for the greenback as a haven. “Bearish data in New Zealand along with substantially weaker Q1 growth numbers in the euro zone, Germany and France are contributing to the bearish sentiment in currency and equity markets,” said Jack Spitz, managing director of foreign exchange at National Bank of Canada in Toronto. “The current environment is likely to see the loonie dominated by external macro influences.” Canada’s currency, known as the loonie, traded at C$1.1690 per U.S. dollar at 10:22 a.m. in Toronto, from C$1.1691 yesterday. One Canadian dollar buys 85.54 U.S. cents. The currency has declined 1.7 percent this week, the biggest drop since the five days ended Feb. 27. It rose for the past six weeks. The loonie erased losses today after the Federal Reserve said industrial production in the U.S. fell 0.5 percent last month, the slowest pace in six months. Greenback Weakens The U.S. currency pared a gain versus the euro, and erased an increase versus the British pound, after the New York Federal Reserve Bank’s general economic index rose to minus 4.6, better than forecast, from minus 14.7 the prior month. “The data in the U.S. is a bit better than expected,” said Diane Hirschberg, vice-president of foreign exchange in New York at Bank of Montreal. “That stopped the strong dollar move, pushing the dollar-Canada down.” Crude oil for June delivery fell 1 percent to $58.02 a barrel. Commodities including oil account for half of Canada’s exports. Factory sales in Canada declined 2.7 percent in March from the prior month to C$41.4 billion ($35.2 billion), Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg News forecast the shipments would gain 1 percent, the median of 20 estimates. Sales have plunged by about a quarter since peaking in July, the agency said. Priced In “This paints a gloomy picture for the economy,” said Matthew Strauss, a senior currency strategist at RBC Capital Markets Inc. in Toronto, a unit of Canada’s biggest bank by assets. “Fortunately, the market has priced that in.” Gross domestic product in the 16-member euro region dropped 2.5 percent from the fourth quarter, when it fell 1.6 percent, the European Union’s statistics office in Luxembourg said. That’s the biggest drop since the euro-area GDP data were first compiled in 1995 and exceeded the 2 percent decline economists expected in a Bloomberg News survey. In New Zealand, retail sales, adjusted for inflation, fell a record 2.9 percent in the first quarter, from the previous three months. The median estimate in a Bloomberg survey was for a 1.5 percent decline. The loonie will weaken to C$1.19 against the U.S. dollar by year-end, according to the median forecast in a Bloomberg survey of 43 economists.

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