Canada’s dollar touched the weakest level in almost five months versus its Australian counterpart on speculation the North American economic recovery is faltering, dimming the prospects for the nation’s exports. The currency fluctuated against the U.S. dollar before a Statistics Canada report tomorrow that economists predict will show the economy expanded more slowly in May than the previous month. Crude oil, Canada’s biggest export, swung between losses and gains. “The Canadian dollar is definitely not outperforming the Aussie,� Stephen Gallo, senior foreign-exchange strategist at Credit Agricole SA in London, said in a telephone interview. “This might have to do with divergence between North America and Asia since Canada has so much exposure to the U.S.� Canada’s currency, nicknamed the loonie, dropped as much as 0.3 percent to C$1.0553 versus Australia’s dollar, the lowest since March 8, before trading at C$1.0532, down 0.1 percent, at 10:33 a.m. in Toronto. It was little changed at C$1.0038 per U.S. dollar. One Canadian dollar buys 99.62 U.S. cents. The loonie was poised for a monthly gain of 1.3 percent against the greenback and a July drop of 1.2 percent versus the Aussie. For the year, the Canadian currency has strengthened 1.7 percent against the U.S. dollar and declined 1 percent versus Australia’s dollar. Government bonds due in seven years and longer rose, pushing the benchmark 10-year yield down two basis points, or 0.02 percentage point, 1.73 percent. The price of the 2.75 percent security due in June 2022 added 19 cents to C$109.25. Crude Oil Crude oil for September delivery fell as much as 0.8 percent to $89.40 a barrel in New York and gained as much as 0.9 percent before trading little changed at $90.20 a barrel. Canada’s gross domestic product, the value of all goods and services produced, rose 0.2 percent in May from a month earlier, when it gained 0.3 percent, according to the median estimate of economists surveyed by Bloomberg News before Statistics Canada reports the data tomorrow. The pace of U.S. hiring in July probably failed to reduce the 8.2 percent jobless rate in the country, Canada’s biggest trading partner, economists said before a report this week. Other U.S. data this week may show manufacturing stagnated in July and consumer confidence fell for a fifth month. The Federal Reserve will open a two-day meeting July 31. While policy makers refrained from introducing a third round of asset purchases at their session last month, Fed Chairman Ben S. Bernanke indicated that it’s a possibility. The central bank purchased $2.3 trillion of securities from 2008 to 2011 in two rounds of a stimulus strategy called quantitative easing. To contact the reporter on this story: Chris Fournier in Halifax at cfournier3@bloomberg.net; Lindsey Rupp in New York at lrupp2@bloomberg.net To contact the editor responsible for this story: Robert Burgess at bburgess@bloomberg.net

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