One currency expert says there are “a lot of reasons” the Canadian dollar could drop to 63 cents against the greenback by the end of next year.

John Taylor, president and editor of the Taylor Global Vision newsletter and founder of FX Concepts, one of the world’s biggest currency hedge funds, says the tables have turned for the loonie.

“It’s just gone through this great spot in a decade long sense,” he told BNN in a television interview Friday. “That great spot has been that the U.S. economy was churning along, it was nice – it had friendly people down here. The price of Canadian products was good. Everything was in your favour, and now it’s not in your favour, and it looks like to me it’s going to be against you for three, four, five years.”  

NAFTA talks have left a cloud of uncertainty hanging over the loonie and is one of the main reasons the Bank of Canada could be kept of the sidelines in terms of raising interest rates. Despite recent optimism about reaching a NAFTA deal, Taylor warns Canadians should still be wary when dealing with the U.S. president.  

“This is Trump on the other side – you guys should not feel good about anything,” Taylor said. “There’s nothing here that says Canada is going to come out smelling like a rose in the NAFTA deal.”

However, Taylor does think things could get better for the dollar before they get worse, with the currency likely breaching the 80-cent level in the next month or so before making its way down to the low 60s by the end of 2019.

Canadians shouldn’t expect much help from the recent rise in oil prices either, he added, referencing the country’s struggle to get energy infrastructure built.

“Commodity cycles are really long,” Taylor said. “The problem is all of this stuff has gone offshore – gone off to third-world countries – and basically Canada has priced itself out. At the same time, these commodity cycles are 30 years in length and we just came off a high.”

On a brighter note, he’s not taking a potential drop in the loonie as a sign of what’s to come for Canadian stocks, predicting the TSX Composite could stand to outperform the S&P 500.

“At least in the near term, because [since] Trump came on board in November of 2016, the S&P has gained eight per cent on the TSX and I think that’s going to be given back. That tells me I’m looking for Canada to outperform by quite a bit.”