July 3 (Bloomberg) -- Canada’s dollar posted a weekly decline on signs the economic recovery is faltering and as crude oil fell below $67 a barrel. The Canadian currency fell for a fifth consecutive week. That’s the longest streak of losses since it dropped six straight weeks through Dec. 14, 2007. Oil fell today for a fourth session to $65.61. “With all this uncertainty it’s not the best time for markets,” said Martin Lefebvre, a senior economist at Montreal- based Desjardins Group, the world’s eighth-largest credit union with about C$160 billion ($138 billion) in assets. “If stocks and commodity prices are correcting, it’s not a good sign for the Canadian dollar.” The Canadian currency traded at C$1.1607 per U.S. dollar at 4:37 p.m. in Toronto from C$1.1524 at the end of last week. It rose 0.2 percent from yesterday’s close at C$1.1630. One Canadian dollar buys 86.16 U.S. cents. Canada is among the most export-dependent countries in the Group of Seven, generating about a third of its output in the first quarter from shipments of goods and services abroad. Canada ships about three quarters of its exports to the U.S. U.S. employers cut 467,000 jobs in June, compared with the 365,000 median forecast in a survey of economists by Bloomberg. Brent crude oil for August settlement fell 4.8 percent on London’s ICE Futures Europe exchange this week. ‘Less Optimistic’ “People are less optimistic about the global economy,” said Firas Askari, head currency trader in Toronto at BMO Capital Markets, a unit of Canada’s fourth-largest lender. “That has negatively affected the Canadian dollar,” he said, adding that he is still “bullish” on the currency. The Canadian dollar may rise against the yen after volatility between the currencies fell to the lowest level since the collapse of Lehman Brothers Holdings Inc., according to Lee Hardman, a currency strategist in London Bank of Tokyo- Mitsubishi UFJ Ltd. “The drop in volatility has been most notable for the Canadian dollar against the yen, and long Canadian dollar versus the yen is my favorite trade,” Hardman said. The implied one-month volatility slid yesterday to the lowest level since Sept. 17, two days after Lehman filed the world’s biggest bankruptcy. Canada’s currency rose 1.4 percent in the past three months versus the yen as volatility declined and the MSCI World Index of stocks climbed 11 percent, stoking demand for higher-yielding assets. Yen Depreciation The loonie, as Canada’s dollar is known for the image of the aquatic bird on the one-dollar coin, rose 0.3 percent to 82.75 yen. Against the greenback, Canada’s dollar appreciated in May the most in almost six decades. “A decline in yen volatility has tended to correlate very closely with trade-weighted yen depreciation,” Hardman said. The loonie fell 6.1 percent against the U.S. dollar last month, the biggest drop among the 16 most-active currencies tracked by Bloomberg, as traders speculated the May advance was overdone. “The pace of appreciation for the Canadian dollar was phenomenal, considering our biggest trading partner was not doing very well,” said Lefebvre. Some think it may have corrected too much. “The U.S. dollar remains extremely overbought versus the Canadian dollar,” Shaun Osborne, chief currency strategist in Toronto at TD Securities Inc., wrote in a note to clients today. “We suspect the market may hold in a tight range through the early part of next week.” Canada’s government bonds have lost investors 1.5 percent this year, according to a Merrill Lynch & Co. index. The 10-year note’s yield rose one basis point, or 0.01 percentage point, to 3.36 percent. The price of the 3.75 percent security maturing in June 2019 fell 4 cents to C$103.32. Trading was lighter than usual as U.S. financial markets are closed for the Independence Day holiday, Askari said.

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