The Canadian dollar strengthened to a nearly three-month high against its U.S. counterpart on Tuesday, one day before a Bank of Canada interest rate decision and updated outlook, as a New Year selloff of the greenback deepened.

The loonie has a tumultuous year ahead, and could slump as low as 65 cents U.S. if things get really bad, according to one of Canada's leading economists.

The loonie wavered Friday as the price of oil, one of Canada's major exports, was on track to end the week lower on lingering doubts over the extent of OPEC cuts.