After sprinting nearly 20% in the year to the end of September, the US Dollar then pulled back roughly 7% in the final quarter of 2022. Economists at the bank of Montreal expect the greenback to lose further ground in 2023

USD/CAD to see an average exchange rate of just under 1.33 in 2023

“We look for some further softening in the year ahead, as the Fed winds down what has been the most aggressive rate-hike campaign among major central banks. The Canadian Dollar is expected to modestly benefit from this move, albeit perhaps less than other major currencies, as the BoC is nearly done with its rate hikes. 

“The Loonie will likely be a bit lower on average in 2023 than this year due to the big pullback late in 2022 (we expect an average exchange rate of just under $1.33 in the coming year). 

“Stretch call: A soggy USD and a pick-up in China’s domestic economy help support commodity prices, even in the face of a North American recession, and the oil price average in 2023 (of about $90) is higher than current levels.”