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Loonie drops to 11-year low in midst of ‘ongoing pressure’

The dollar continues to drop against the greenback -- and could remain at current levels for some time, experts say. Credit/The Canadian Press

The Canadian dollar continues to drop steadily, hitting a fresh 11-year low on Thursday after dropping nearly half a cent against the U.S. dollar overnight.

The loonie is currently sitting at 74.6 cents U.S., and has fallen nearly 20 per cent in the last year.

“The currency is under ongoing pressure amid relentless concerns over the global growth outlook, persistent weakness in oil prices, and [some] political uncertainty,” BMO chief economist Doug Porter said, noting that polls open to determine one the closest federal elections in memory in less than four weeks.

Porter believes the loonie will hang around these levels for some time, though others, like economists at TD Bank, suggest the Canadian dollar is poised to fall at least another penny against the greenback.

Low for long

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What’s more certain is that the dollar won’t be heading higher in value against the U.S. greenback, currency experts suggest.

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“We continue to see few catalysts for the Canadian dollar, with risk in the medium term continuing to be centered around monetary policy, oil, and the impending Canadian election,” Rahim Madhavji, president at Toronto-based Knightsbridge Foreign Exchange, said.

MORE: Cheaper gas, costlier food, clothing — welcome to your new normal, Canada

During the CAD’s “lengthy bout of weakness” against the U.S. dollar in the 1990s, the 75-cent mark served as a particularly sticky valuation, Porter said. “It held around these levels for almost four years.”

WATCH: The dollar has been on a downward slide for months. It’s good news for foreign tourists but not so great for Canadians watching their buying power slide. Reid Feist reports.

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