June 26 (Bloomberg) -- Canada’s dollar headed for the fourth straight weekly decline, the longest losing streak since March, as investors trimmed bets on riskier assets such as stocks and commodity-linked currencies.

The loonie, as the Canadian currency is known for the aquatic bird on the one-dollar coin, was down 1.3 percent for the past five days amid comments from central bank Governor Mark Carney that equated Canada’s recession with the U.S. slump. Crude oil, the nation’s biggest export, fell below $70 a barrel. Stocks declined.

“Commodity currencies appreciated a lot in the past few months, and that was a bit exaggerated,” said Christian Apelt, a Frankfurt-based currency strategist at Landesbank Hessen- Thueringen, a German state-owned bank. “I expect a pullback for these currencies,” including the Canadian dollar.

The currency traded at C$1.1497 per U.S. dollar at 12:56 p.m. in Toronto, down from C$1.1352 on June 19. It touched C$1.1638 yesterday, the weakest in more than a month. One Canadian dollar buys 86.98 U.S. cents. The loonie rose the most in May in almost six decades.

Crude oil for August delivery fell 1.4 percent today and 0.5 percent for the week to $68.98 a barrel. Raw materials including crude account for more than half of Canada’s export revenue. The Standard & Poor’s 500 Index headed for its second weekly loss.

‘Not Really Surprising’

“The Canadian dollar has outperformed most currencies in recent months, so it’s not really surprising to see this kind of realignment,” said John Curran , a Toronto-based senior vice president at CanadianForex Ltd., an online foreign-exchange dealer. “The Canadian dollar has been sold off against virtually every Group of Seven currency, which usually means there’s some realignment of positioning taking place.”

The loonie, which gained 19 percent from March 9 through May, is still set to rise 9.4 percent this quarter against the U.S. dollar. That compares with 17 percent and 15 percent gains, respectively, for the Australian and New Zealand dollars, which like their Canadian counterpart tend to track fluctuations in commodity and stock prices.

The Bank of Canada’s Carney warned at least twice this month that the loonie’s “rapid rise” threatened the economy. He said in remarks in Washington on June 23 that the recession in Canada is now as deep as the U.S. slump.

“The underperformance in the Canadian dollar is at least partly due to Carney’s comments,” said Camilla Sutton, director of currency strategy at Scotia Capital Inc. in Toronto. “However, the Australian dollar is far more weighted to Asia -- a big plus -- and its economy is on much firmer footing.”

Government Bonds

Canada’s gross domestic product will shrink 3 percent this year, the central bank predicts, the biggest drop since 1933. The nation ships three-quarters of its exports to the U.S.

Canadian government bonds have lost investors 2 percent this year, according to a Merrill Lynch & Co. index. The 10-year note’s yield fell two basis points today, or 0.02 percentage point, to 3.39 percent. It was headed for a 12 percent decline for the week. The price of the 3.75 percent security maturing in June 2019 rose 19 cents on the day and C$1.02 on the week to C$103.01.

The U.S. Treasury 10-year note’s yield advantage over the comparable Canadian government bond was 10 basis points. Canada’s 10-year bond yielded 47 basis points more than its U.S. counterpart at the end of 2008.

The loonie will trade at C$1.13 by the end of the year, according to the median forecast of 37 economists and analysts surveyed by Bloomberg News.

To contact the reporter on this story: Chris Fournier in Montreal at cfournier3@bloomberg.net

Last Updated: June 26, 2009 13:00 EDT