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On top of weakness in resource prices, Mr. Madani said that recent economic data suggests that the Bank of Canada will not be hiking interest rates this year, another event that could have potentially strengthened the loonie against its U.S. counterpart.

“Business investment prospects already look less sure than a month ago,” he said. “The recent drop in Canadian oil prices to below breakeven levels (US$60 to US$80 per barrel) is troubling, given the risk of a prolonged slump in global economic demand, which could prompt producers to shelve investment plans.”

Mr. Madani also said that the recent revision to mortgage rules in Canada, which saw Finance Minister Jim Flaherty scale back amortization periods to 25 years, will act to curb housing activity. That could further add to economic weakness in a country where housing provides a considerable portion of GDP.

A report from Scotia Economics, however, said that there is the potential for the loonie to finish at parity with the U.S. dollar by the end of the year.

Economists at Scotia said that expectations of rate hikes may return later in the year if global economic sentiment improves. Other factors that could boost the loonie incide China’s latest stimulus efforts, which may prop up commodity prices by the end of the year. South of the border, weakening U.S. inflation could boost spending, lifting Canadian exports.

Scotia sees the loonie hovering around parity for much of 2013 as well.

Mr. Madani of Capital Economics warned that the downside risks outweigh the upside risks for the loonie. For instance, lower oil prices could drive down the loonie more than even his bearish forecast.

“It is difficult to see how this would not upset the domestic economy, putting even more downward pressure on the Canadian dollar,” he said.