07:50 AM EDT, 10/03/2025 (MT Newswires) -- USD/CAD has come off its 1.36 lows lately, noted UBS.

While much of the support was driven by the US dollar (USD), the Canadian dollar (CAD or loonie) also played a role, wrote the bank in a note to clients.

Signs of weakness are now clearly visible in the Canadian economy, said UBS. Growth has slowed, economic surprises have dropped into negative territory and payrolls growth has been significantly negative for the past two months.

As a consequence, the September Labour Force Survey (LFS) data due next week bear watching, stated the bank. Risks are skewed to the upside for the print, in the bank's view, which should limit scope for a rise in USD/CAD.

Rather, UBS estimates a reversal toward 1.38 in the coming weeks -- also thanks to continued pressure on the USD