Loonie drops below 80 cents US

The Canadian dollar has slippedbelow 80 cents US for the first time in almost six years.

The loonieclosed at 79.87cents US onWednesday, downabout three-quartersof a cent from Tuesday's close.

The Canadian dollar'stumble accelerated justafter the U.S. Federal Reserve reiteratedit will be patientin raising rates from record lows and noted that the U.S. economy continues to improve.

• Canadian dollar could fall to 75 cents on weak oil prices, experts say
• Canadian dollar slump hikes cost of U.S. imported goods

That statement immediately sent the value of the U.S. dollar up against many major of the world's currencies, including the Canadian dollar.

"The strong divergence of the Fed having a tightening bias, regardless of how much they end up tightening, is likely to keep the [U.S.]dollar supported versus most currencies,"Robert Tipp, a chief investment strategist at Prudential told Bloomberg.

At official exchange rates, the dropping value of the loonie meansit now costs more than $1.25 to buy a U.S. dollar.

Lowest since April 2009

The Canadian dollar hasn't traded below 80 cents US since April 2009.

"The Fedis leaning towards rate hike mode, while the [Bank of Canada]is in a rate cut mode. It is a tale of two worlds," wroteRahim MadhavjiofKnightsbridge Foreign Exchange in an emailed commentary.

"The trend is the friend for the U.S. dollar. The next few months could get ugly for the loonie."

Economists have forecast that the Canadian dollar could drop to 75 cents US or even lower, depending on a number of factors, including the length of the current oil price slump. Lower oil prices are considered a negative for the loonie's value.

Crude oil prices dropped $1.78 to close at $44.45 US a barrel on Wednesday. That was the lowest close for crude futures since March of 2009. The U.S. Energy Department reported earlier in the day that oilinventories had risento their highest levels ever recorded.