The loonie traded as low as 89.50 overnight as foreign investors reacted to developments in Canada on Wednesday.
The Bank of Canada issued a very dovish policy statement in which it opted to keep interest rates where they are. Economists also interpreted the statement that accompanied that decision as a sign the bank is leaning toward lowering rates, not raising them, if and when it chooses to act.
A little before 9 a.m. ET, the loonie had regained some ground, rising to 89.96 cents US.
"I expect it to go lower," Scotiabank portfolio adviser Andrew Pyle told CBC on Wednesday, "We'll probably see the Canadian dollar get down to 85 cents against the U.S. dollar and that probably means we're not going to get any rate cuts in Canada."
The loonie has already lost more than four cents compared to the U.S. dollar in January.