12.01.201522:29:24UTC+00Canadian dollar slides to 5 1/2 year low on declining oil prices

The Canadian dollar reached a new 5 ½ low versus the US dollar Monday as oil prices continued to slide, gliding the currency to a major psychological support level at C$1.20 to the greenback.

Crude prices dropped 5% to its weakest in almost six years, prolonging the second deepest rout on record following Goldman Sachs said prices would slide and remain close to $40 for most of the first half of 2015, and Gulf producers did not signal reducing output.

"We're now talking about whole numbers and C$1.20 is the next key level. It's a very important one because it is a big psychological shift going from the teens up to C$1.20," said Camilla Sutton, Chief Currency Strategist at Scotiabank.

The loonie ended at C$1.1967 to the greenback or 83.56 US cents, lower than Friday's C$1.1866 or 84.27 US cents, its lowest since May 2009. The currency was at about C$1.16 at the beginning of 2015, and at C$1.06 in the middle of 2014.

Meanwhile, market participants would await  Bank of Canada Deputy Governor Timothy Lane’s speech Tuesday.