The Canadian dollar touched a three-year low on speculation thatslowing growth and risks of cooling inflation outweigh animprovement in the labor market.

The currency headed for a third weekly loss against its U.S.peer, the longest slump since August, after official data showedemployment in Canada rose by 21,600 last month and the jobless rateremained 6.9 percent, the lowest since 2008. The Canadian dollarweakened beyond C$1.07 for the first time in three years Dec. 4after the central bank kept interest rates at 1 percent and warnedthe risks of inflation remaining below its target band hadincreased.

“The BOC's focus now is really on inflation and exports—thisjobs report is less important,” Camilla Sutton, head of currencystrategy at Bank of Nova Scotia, said by phone from Toronto. “Thejobs report highlights things in Canada are better than otherpeople thought.”

The loonie, as the Canadian dollar is known for the image of theaquatic bird on the C$1 coin, was little changed at C$1.0655 perU.S. dollar at 2:01 p.m. in Toronto after falling as much as 0.5percent. The currency touched C$1.0708, the least since May 2010.It's down 0.4 percent this week after dropping 1.7 percent theprevious two weeks. One loonie buys 93.85 U.S. cents.

Futures on crude oil, Canada's biggest export, touched $98.07per barrel in New York, its highest point since Oct. 29. beforetrading at $97.53.

Canada's benchmark 10-year government bond yield rose two basispoints, or 0.02 percentage point, to 2.70 percent. The price of the1.5 percent security maturing in June 2023 fell 17 cents toC$90.04. The yield was 17 basis points lower than similar maturityU.S. securities after reaching 20 basis points on Nov. 28, thewidest gap since February 2011.

Triple Top

The loonie's 14-day relative strength index against thegreenback was at 31 after reaching 25 yesterday, below the 30threshold which may indicate the currency's drop is losingmomentum.

“The decline in the Canadian dollar has been too fast,” VassiliSerebriakov, a foreign-exchange strategist at BNP Paribas SA in NewYork, said in a phone interview. “I'm overall bearish on the CAD,we just need to see U.S. yields rise more. In the meantime, CADwill stay range-bound.” The loonie has traded between C$1.0611 andC$1.0708 this week.

The loonie will reverse losses in the coming sessions based onchart patterns, according to John Curran, senior vice president atCanadian Forex Ltd., an online foreign-exchange dealer.

“There is now a triple top at the C$1.0700-to-C$1.0710 areaposted over the last three days, which is a significant technicalsignal,” Curran said in an e-mail. “To add to this, we already havean outside day today, meaning a higher high and lower low than theprevious day. It is a strong indicator of a reversal in trend.”

The loonie fluctuated against the greenback after adding themost jobs in three months, Statistics Canada said today in Ottawa.Economists surveyed by Bloomberg News had projected a 12,000 gain,while predicting the unemployment to remain unchanged.

The U.S. dollar rose versus the yen after data showed payrollsincreased by 203,000 in November, following a revised 200,000advance the previous month, Labor Department figures showed inWashington. Economists called for a 185,000 advance in a survey.The jobless rate fell to 7 percent.

The Canadian dollar has lost 4.4 percent this year against ninedeveloped-market peers tracked by the BloombergCorrelation-Weighted Index. The U.S. dollar gained 3.6 percent. Theeuro is the biggest gainer, up 7.9 percent, while the yen's 14percent drop paced decliners

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