09:12 AM EST, 11/06/2025 (MT Newswires) -- This week saw the release of the Canadian federal budget, which came broadly in line with market estimates, triggering little initial market reaction, said UBS.

While on paper this supports USD/CAD's current low volatility regime, the bank sees this as a buying opportunity.

In contrast to EUR/USD volatility, USD/CAD implied volatility is already at levels where it's difficult to find historical precedents of it realizing much lower, even during very benign years for risk, such as 2019, stated UBS.

This is especially the case with United States-Canada trade issues, likely to come back into focus next year with the review of the USMCA agreement. Consequently, this week the bank recommends going long a six-month USD/CAD volatility swap.