Bank of America Global Research discusses Canada economic outlook and USD/CAD forecasts through 2023.

Will Canada have a recession in 2023?

"Most likely, although probably a mild one...We expect Canada to grow 0.8% yoy in 2023 and 1.0% yoy in 2024. We expect three consecutive quarters of negative growth in 2023. Medium term, North America has a big opportunity due to reshoring/nearshoring,"BofA notes.

Will USD/CAD eventually fall in 2023?

"Yes, we maintain our downtrend USD/CAD forecast for the year despite the BoC rate hike pause. We believe CAD will benefit from supportive equity factor, energy factor, and seasonality in the coming months. We maintain our Q1 forecast of 1.32 and year-end forecast of 1.25 for USD/CAD," BofA adds