Loonie could fall by 10% over the next year: TD

The loonie's recent march back to parity with the U.S. dollar is not sustainable, according to TD economists.

A combination of a slowing Canadian economy, an interest rate hike that is still more than a year out, softening commodity prices and a swelling deficit will push the loonie lower over the next year, TD economists Francis Fong and Leslie Preston write in a report to clients

"The recent bout of weakness faced by the Canadian dollar over the last 6 months is set to persist over the next year. We anticipate the loonie to drop towards the $0.90-0.92 US range by late 2013 and early 2014, before renewed stability sets in by the second half of next year," the economists said.