OTTAWA - The shine is about the come off the Canadian dollar.

TD Bank says in a new forecast the loonie, which has been hovering around parity with the United States, could hit as low as 90 cents US by the end of the year and early 2014.

The loonie has actually strengthened of late since falling as low as 96.68 cents US in March, but economists Francis Fong and Leslie Preston, who wrote the report, say that won't last.

"OK, fine it has strengthened, but that doesn't change the fundamental story," Fong explained. "If you look at the fundamental factors driving the Canadian dollar, we think the outlook is all down."

The analysts note Canada is now expected to underperform the United States in economic growth this year and commodity prices, which have been a major factor behind the loonie's flight, are expected to remain weak given slower-than-anticipated growth in China. Finally, the U.S. dollar is doing better and the Bank of Canada has signalled interest rates will remain low for longer.

The lower dollar is bad news for Canadian snowbirds planning to vacation in the sunny south next winter, or anyone hoping to buy property in the United States. It is also a handicap for professional sports teams that compete in North American leagues, who must pay their players in greenbacks.

But overall, economists believe a weaker currency is a net benefit for the economy especially given that about 75 per cent of Canadian exports are sold in the U.S. market. As well, a low-flying loonie will help lure American tourists and help Canadian retailers hurt by cross-border shoppers.

The Bank of Canada is counting on growth in exports to sustain economic growth given that consumers are tapped out and heavily in debt. A lower dollar would be a boost to exporters by making Canadian products more competitive south of the border.

"The transition within the Canadian economy towards more business investment and export-led growth has not been smooth thus far," the economists say. "A depreciation in the loonie to a level more consistent with fair value estimates — pegged around 80-90 cents US — should help facilitate that transition."

Other analysts have also predicted a soft period for the Canadian loonie, but the TD economists' outlook is for among the biggest corrections.

Still, they say the loonie is unlikely to remain there for long. They say the Bank of Canada is likely to start raising interest rates before its counterpart in the United States, which should help the Canadian currency stabilize and rebound somewhat closer to parity.

Earlier on HuffPost:

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  • Bank of Montreal Dollar - 1825

    Until the mid-19th century, Canada's future provinces used the "Canadian pound." Bit by bit, various jurisdictions began to switch to a metric system, and with it came the concept of the Canadian dollar. This Bank of Montreal-issued dollar bill is among the first bills called a dollar to have been printed.

  • Bank of Montreal Dollar - 1859

    Various banks printed their own currency until eventually the Bank of Montreal was charged with being the official issuer of the Canadian dollar, a practice that stayed in place until the Bank of Canada was created in the 1930s.

  • Bank of Toronto Dollar - 1859

    The Bank of Toronto (today known as TD Bank) was among many banks that issued Canadian dollars in the second half of the 19th century.

  • Ontario Bank Dollar - 1861

    Image courtesy of the Bank of Canada.

  • Province of Canada Dollar - 1866

    The province of Canada comprised Ontario and Quebec and existed from 1841 to 1867. It issued its own currency. Image courtesy of Bank of Canada.

  • Dominion of Canada Dollar - 1870

    With confederation in 1867, the first truly national Canadian dollar came into being. Image courtesy of the Bank of Canada.

  • Dominion of Canada Dollar - 1898

    Image courtesy of the Bank of Canada.

  • Dominion of Canada Dollar - 1911

    Image courtesy of the Bank of Canada.

  • Dominion of Canada Dollar - 1917

    Image courtesy of the Bank of Canada.

  • Dominion of Canada Dollar - 1923

    Image courtesy of the Bank of Canada.

  • Bank of Canada Dollar - 1935

    The Bank of Canada took over the issuance of currency from the Bank of Montreal when it was created in the 1930s. Image courtesy of the Bank of Canada.

  • Bank of Canada Dollar - 1937

    Image courtesy of the Bank of Canada.

  • Canada Dollar - 1954

    The 1954 dollar was the first to feature Queen Elizabeth II and the first to simply say "Canada" on it, rather than featuring the name of a bank, province or referring to the country as a "dominion."

  • Centennial Dollar - 1967

    Image courtesy of the Bank of Canada.

  • Canada Dollar - 1973

    This was the last paper dollar issued in Canada. It was in circulation until 1987, when the loonie replaced it. Image courtesy of the Bank of Canada.

  • The Loonie - 1987

    The loonie replaced the one-dollar bill in Canada in 1987. Image: CP

  • Canada 125 Loonie - 1992

    The Mint issued a special edition of the loonie in 1992 to commemorate the country's 125th birthday.

  • Vancouver Olympics Loonie - 2010

    An Inuit inukshuk graced the tail of this loonie issued in 2010 to coincide with the 2010 Winter Games in Vancouver.

  • The Loonie - Anniversary Special - 2012

    The Royal Canadian Mint issued a special-edition version of the loonie in 2012 to commemorate the coin's 25th anniversary. Image: Royal Canadian Mint.