The Canadian dollar has dropped below the 70-cent US level for the first time since May 2003. 

When stock markets closed on Tuesday, the loonie was changing hands at 70.13 cents US, down by about a fifth of a cent after earlier dipping below the 70-cent threshold for the first time since May 2003. 

That means one U.S. dollar can purchase almost $1.43 Canadian. 

The currency's historic low is 61.79 cents US — set in January 2002 — but it hit an all-time high of 110.3 cents U.S. in November 2007 as Canada's resource-heavy economy benefited from global demand for its exports. 

The Canadian dollar was also dragged down by oil, which briefly dipped below $30 US a barrel for the first time since Jean Chrétien was prime minister. 

The price of oil has now declined every single trading day of 2016. 

Much of the loonie's weakness is in comparison to the U.S. dollar and not necessarily against other currencies. 

"The U.S. dollar becomes a refuge, and that's what we've seen in the last few days," said Patrick Leblond, an expert in finance at the University of Ottawa. 

Stock indexes, meanwhile, staged a big rally to close out the day, with the Toronto Stock Exchange turning a 120-point loss at one point into a 54-point gain to close at 12,373. 

The Dow Jones industrial average and broader S&P 500 were both up by about one per cent each on the day. 

Despite the gains later in the day, the trading began amid a sour mood, summed up in a report from the Royal Bank of Scotland, which advised clients to "sell everything" in a report early Tuesday. 

"This all looks similar to 2008," the bank's research economist Andrew Roberts said. " We dust off our old mantra: this is about return of capital, not return on capital."