The loonie, the nickname derived from the image of the bird on Canada's one-dollar coin, declined by the most in two weeks. The currency has strengthened 18 percent against the U.S. dollar in the past year.
The Canadian dollar fell 1 percent to 99.46 cents per U.S. dollar at 8:35 a.m. in Toronto, from 98.44 cents yesterday, when it touched 97.98 cents. One Canadian dollar bought $1.0054.
Strategists at Morgan Stanley and Goldman Sachs Group Inc. said the U.S. dollar's decline may trigger the first joint effort to shore up the currency in 13 years. The U.S. dollar yesterday fell below $1.56 a euro for the first time and slumped to the lowest level in 12 years versus the yen. Central banks can influence markets by buying or selling a currency.
Canadian labor productivity fell by the most in 12 years in the fourth quarter, as workers leave the country's shrinking manufacturing sector for jobs in less efficient industries such as mining. Productivity, a measure of how much an employee produces in an hour of work, fell 0.8 percent in the fourth quarter, Statistics Canada said today in Ottawa, the biggest decline since the third quarter of 1995.
The yield on Canada's two-year government bond fell 4 basis points, or 0.04 percentage point, to 2.50 percent. The price on the 4.25 percent bond due December 2009 rose 7 cents to C$102.91.