Canada’s dollar fell against its U.S. counterpart amid concern faster inflation in China may lead the country’s central bank to raise interest rates, curbing growth and demand for imports such as commodities. The loonie, as the currency is nicknamed, declined versus most major peers as Asia’s largest economy expanded 9.7 percent from a year earlier in the first quarter and consumer prices rose 5.4 percent in March, the fastest pace since 2008, the statistics bureau said today. Crude oil and copper futures declined. Raw materials, including oil, account for about half of Canada’s exports. “The strength of the Chinese data has ramped up expectations of further tightening in China, which could be bad for growth and the commodity space,” said Jeremy Stretch, executive director of foreign-exchange strategy at Canadian Imperial Bank of Commerce in London. “Commodity currencies in general are trading a little weaker, and the Canadian dollar is no exception.” The loonie weakened 0.4 percent to 96.47 cents per U.S. dollar at 9:50 a.m. in Toronto. One Canadian dollar buys $1.0366. Oil Drop Crude oil for May delivery on the New York Mercantile Exchange fell 0.3 percent to $107.76 a barrel. Copper for three- month delivery dropped 0.2 percent to $9,395 a ton on the London Metal Exchange. The International Monetary Fund and Group of 20 nations are gathering in Washington this week as the U.S. and Europe debate when and how to rein in budget deficits. The Canadian dollar “is biased toward a little bit of weakness,” said Michael O’Neill, managing director at Knightsbridge Foreign Exchange Inc. in Toronto. “It’s going to retreat a bit on profit-taking ahead of a weekend with the G- 20.” Canadian government bonds rose, pushing the yield on the benchmark 10-year down five basis points, 0.05 percentage point, to 3.32 percent. The price of the 3.5 percent security maturing in June 2020 added 38 cents to C$101.43. Foreign direct investment in Canada accelerated last year, led by increased flows from U.S. investors, a government report showed. Canadian direct investment abroad declined for a second year. Foreign direct investment in Canada rose 2.6 percent to C$561.6 billion ($585.5 billion), as investment from the U.S. rose 5 percent to C$306.1 billion, Statistics Canada said in a report today. Direct investment excluding the U.S. fell 0.3 percent. The share of direct investment in Canada held by U.S. investors rose for the first time since 2004 to 54.5 percent, the statistics agency said. Canadian direct investment abroad fell 0.7 percent to C$616.7 billion on an appreciating currency, which reduces the Canadian dollar value of foreign investments. To contact the reporters for this story: John Detrixhe in New York at jdetrixhe1@bloomberg.net; Frederic Tomesco in Montreal at tomesco@bloomberg.net. To contact the editor responsible for this story: Robert Burgess at bburgess@bloomberg.net

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