In an interview with Global Finance, Stephanie Larivière, Global Head of FICC Sales, explains how a client-first philosophy and advanced structured solutions enable businesses to proactively manage uncertainty, effectively diversify risk, and maintain agility amid fast-moving currency markets.
This interview follows on Scotiabank’s recognition by Global Finance as ‘Best FX Bank in Canada’ and ‘Best FX Derivatives Provider Globally’. These awards are part of the Global Finance Gordon Platt Foreign Exchange Awards 2026.
Global Finance: Last year began with elevated G7 foreign exchange volatility driven by election results in the U.S., followed by spiking volatility based on the Trump administration’s tariff announcements. Implied volatility eventually subsided. Against this backdrop, how has client demand evolved for structured FX solutions and derivatives that combine FX with interest rate and other exposures?
Stephanie Larivière: Before I get to your question, I want to underscore the point that, at Scotiabank, we care deeply about our clients. We choose to approach our business from their standpoint and with their wellbeing in mind. It’s an ethos that drives everything we do in both good and challenging times.
Stephanie Larivière
Global Head, FICC Sales
Turning to 2025, tariffs, and the resulting uncertainty around international trade, were top of mind for clients throughout the year. In the first half of 2025, the U.S. Dollar Index vaulted back toward the highs we saw during the pandemic and there were fears that it would be driven even higher as we grappled with the prospect of a global recession, given the U.S. administration’s push for increased global tariffs. We saw increased interest in hedging and the need for structured solutions from clients in these early months as U.S. dollar buyers worried about a sustained surge in the index and the impact on their cash flows. The outlook for exports into the U.S. remains no less murky moving forward. As a result, client demand for structured FX solutions has only increased.
GF: Have you observed currency diversification strategies or increased activity in non-dollar crosses from your customer base?
Larivière: The uncertain outlook for international trade and dissenting views on the Federal Reserve Open Market Committee have led to increased demand from clients to protect against further potential dollar weakness. As we settle into a lower volatility regime, we have seen an interest to express some views in non-dollar crosses, as well as some rotation into international and emerging-market equity exposure.
One example was a strengthening Mexican peso as clients returned to expressing views via carry trades. We have also seen a weak Canadian dollar versus other majors, resulting from ambiguity around Canada’s budget and the size of the Carney government’s deficit, as well as questions around how the new U.S. and Canadian administrations will work together. That said, the reality is that the U.S. dollar is still the dominant base currency in most commodities and currency trading.
GF: OTC interest rate derivatives volumes have surged, nearly doubling for euro-denominated contracts and rising significantly for yen and sterling. How are clients adapting their strategies in response to this increased activity?
Larivière: There are a couple of factors at play here. Greater volatility in rates has caused volumes to surge. Central banks were also more in play over the second half of last year, which further contributed to this phenomenon. Both factors are a response to an overexposure to the dollar and a shift to hedge against some of that exposure. We could see this continue to increase as larger institutional names adjust their exposure to the U.S.
GF: Are clients’ expectations changing around reporting transparency, multi-currency liquidity, and access to customized derivatives products?
Larivière: Clients are looking for bespoke hedging solutions derived from a full suite of derivatives products across asset classes. These customized solutions are tailored to their unique requirements, allowing clients to express views on markets while hedging underlying exposures. Along with the increased flexibility that these products provide, clients expect proactive advice that leverages expertise from sales, trading, strategy, and structuring teams.
At Scotiabank, we strive to provide thoughtful, well-coordinated ideas and a wide range of hedging solutions that help clients navigate the uncertainty of operating global businesses across borders in an unpredictable international trade environment.
GF: What trends do you expect will shape FX and derivatives markets this year, particularly regarding volatility, market structure, and regulation?
Larivière: The Fed has embarked on a cutting cycle, although it is unclear how deep their cuts will be. If yields continue to decrease, we expect to see increased pressure on the dollar, leading to higher volatility. The FX market typically experiences growth during periods of volatility; the shift away from yield enhancement strategies toward a pickup in volatility should drive an increase in FX volumes in 2026.
Another theme we are watching is the shifting regulatory landscape about digital assets. Regulatory changes that favor these assets will facilitate more interest and investment in these emerging products.
