07:53 AM EDT, 05/30/2025 (MT Newswires) -- The Bank of Canada is likely to leave its policy rates

unchanged next Wednesday and UBS expects USDCAD to continue its downward trajectory over time.

The bank's opportunity of the week centers around a continuation of the AUDCAD's recent rebound.

The AUDCAD currency pair usually trades in a tight range around the 0.90 level, according to UBS. However, in the aftermath of the "Liberation Day" tariff announcements by United States President Donald Trump, the pair dipped briefly to levels below 0.85 and since then recovered very gradually to 0.89.

In the bank's view, there remains further ground

to make up, with a move above 0.90 likely in the coming

months. Key catalysts include the improving chance of a

U.S.-China trade deal, relative upside for mined commodities versus energy, and a much smoother domestic rebound in Australia.

In addition, UBS doesn't foresee a sharp rally in the

Canadian dollar (CAD or loonie). As a result, the bank likes to be long AUDCAD at 0.89, with a target of 0.92 and a stop-loss of 0.8750.