03/06/2015 05:42 EST | Updated 03/06/2015 05:59 EST

Just How Low Will The Loonie Go?

Canadians travelling abroad might be in for more bad news.

The Canadian dollar fell to below 80 cents on Friday, battered by bad news at home and good news south of the border, leaving economists scrambling to predict just how low it could go.

The loonie ended the week at 79.3 cents U.S., sinking after a report showed Canada had its worst trade balance in nearly three years alongside news of an improving job situation south of the border that lifted the U.S. greenback.

In theory, the low loonie should help exports by making Canadian-made goods cheaper abroad. But Canada posted its largest trade deficit since 2012, of $2.5 billion in January on the back of plunging oil prices.

Meanwhile, the U.S. economy easily surpassed expectations and pumped out 295,000 jobs in February, bringing the unemployment rate to 5.5 per cent, the lowest it has been since 2008.

With little evidence that other sectors will pick up the economic slack from the sinking oil sector, along with record high household debts and a volatile labour market, economists have been racing to find the bottom.

“The Bank of Canada keeps touting the long-awaited rotation to exports and investment; I say the rotation is keeping itself very well disguised,” BMO chief economist Doug Porter wrote in a note Friday.

BMO predicts the loonie will continue to be at its cheapest rate in six years for 2015.

Scotiabank’s chief currency strategist Camilla Sutton said she expects the loonie to sink further, to as low as 75 cents.

After the Bank of Canada announced this week that it is holding the interest rate at 0.75 per cent following a surprise cut in January, Sébastien Galy, the senior foreign exchange strategist at Société Générale said he believes the loonie is close to hitting bottom, with a rebound in sight after that.

“It is now cheap on all metrics and the potential for a widening of rate differential expectations is close to peaking,” the Globe and Mail reported.

But others have predicted the loonie could fall by as much as another 10 cents. It could be worth as little as 69 cents U.S., Macquarie Group Ltd. predicted last month,

The loonie has already fallen 15 per cent from its high last July. Poor performance in the oil and gas sector as well as the Bank of Canada’s low overnight lending rate have contributed to the cheaper Canadian dollar.

The weaker loonie is generally good for manufacturing and export-oriented sectors and job prospects -- the auto sector has already seen a boost in investment and job opportunities because the weak loonie makes Canadian labour cheaper. But it is bad news for imports and Canadians travelling abroad.

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