The loonie was up 0.08 of a cent to 94.46 cents US after dropping almost 0.6 of a cent Wednesday amid a sharp drop in oil prices.
Statistics Canada reported that the current account deficit decreased $500 million to $15.5 billion in the third quarter on a seasonally adjusted basis.
That was still about $1 billion more than economists expected.
"However, most of that miss was due to a sharp downward revision to the prior quarter's tally, suggesting the current account actually improved marginally in Q3 relative to the prior quarter," said CIBC World Markets economist Emanuella Enenajor.
A run of trade deficits is just one reason why U.S. investment bank Goldman Sachs issued a report Thursday that forecasts the loonie will sink to 88 cents US.
Goldman noted that "a decline of about 30 per cent in manufacturing exports is largely responsible for the current account balance falling from a surplus of one per cent of gross domestic product to a deficit of three per cent."
Other headwinds against the loonie include lower oil prices and a central bank that isn't likely to start raising interest rates until 2015.
There have even been suggestions that the Bank of Canada might cut rates.
Also, the American dollar has gained strength on speculation that the U.S. Federal Reserve could start winding up its US$85 billion of monthly bond purchases.
Although the loonie is already at its lowest levels since the summer of 2010, some analysts think the Goldman forecast is far too pessimistic.
"Certainly the dollar is weak but it hasn’t fallen off a cliff," observed Camilla Sutton, chief currency strategist at Scotia Capital.
In fact, she pointed out that "when all the negatives are added up, it’s quite surprising the resilience of the Canadian dollar."
She thinks the dollar could be heading at low as 93 cents US and that the currency will find support from south of the border.
"One of the things that helps limit losses in the loonie is that, with better than expected growth in the US, that should also translate into Canada so that would help offset some of the negative side," she said.
Inflation is well under control, another reason the bank is in no rush to hike rates.
However, all the other factors are generally negative, particularly over the next six months, for the dollar.
Meanwhile, the major economic report of the week comes out Friday when Statistics Canada releases the latest economic growth figures for September and the third quarter.
The consensus calls for the economy to have grown at an annualized rate of 2.4 per cent in the quarter.
The trading session was relatively quiet with U.S. markets closed for the Thanksgiving holiday.
On the commodity markets, the January crude contract was off five cents to a six-month low of US$92.25 a barrel in electronic trading on the New York Mercantile Exchange late in the afternoon. Oil racked up a steep loss of $1.38 on Wednesday as U.S. oil inventories unexpectedly rose last week instead of declining.
The Energy Department reported that the U.S. supply of crude oil is now 391.4 million barrels, which is 4.6 per cent above year-ago levels and “well above the upper limit of the average range for this time of year.”
December gold bullion rose $6.50 to US$1,244.45 an ounce while March copper was up one cent to US$3.20 a pound.Suggest a correction