The Canadian Dollar strengthened versus the euro to almost the highest level in three weeks on speculation the European Central Bank will signal it is open to cutting interest rates when policy makers meet this week. Canada’s currency was little changed against the U.S. dollar as politicians in the U.S., Canada’s biggest trading partner, continued budget discussions linked to the requirement to boost the nation’s debt ceiling. Producer-price inflation in the euro-area slowed in November, which may prompt the ECB to lower its benchmark interest rate to spur faster growth. “You’re waiting for the next shoe to fall,� David Tulk, chief macro strategist at Toronto-Dominion Bank’s TD Securities unit, said by phone from Toronto. “A lot of the fiscal-cliff information has already been absorbed into the market and we’re not quite out of the woods yet there either -- negotiations on the spending side are ongoing.� The loonie, as the Canadian dollar is known for the image of the aquatic bird on the C$1 coin, was little changed against its U.S. counterpart at 98.72 cents per U.S. dollar at 8:14 a.m. in Toronto. One Canadian dollar buys $1.0130. The currency rose 0.2 percent to C$1.2874 per euro, close to the strongest level since Dec. 13. To contact the reporter on this story: Ari Altstedter in Toronto at aaltstedter@bloomberg.net To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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