Stephanie Larivière, managing director and global head of Fixed Income, Currencies, and Commodities (FICC) Sales at Scotiabank—which was named the Global winner of Best FX Derivatives Provider—explains how a client-first philosophy and advanced structured solutions enable businesses to proactively manage uncertainty, effectively diversify risk, and maintain agility in fast-moving currency markets.
Global Finance: Last year began with elevated G7 foreign exchange volatility driven by US election results, followed by a spike in volatility tied to 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: Tariffs and the resulting uncertainty around international trade were top of mind for clients throughout 2025. In the first half of the year, the US 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 US 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 US dollar buyers worried about a sustained surge in the index and the impact on their cash flows.
The outlook for exports to the US remains no less murky moving forward. As a result, client demand for structured FX solutions has only increased. Clients have focused on cost management and have incorporated flexibility into hedging programs via options-based solutions. By protecting existing profit margins while retaining the ability to participate in favorable moves in FX markets, these strategies have allowed clients to remain agile and adapt quickly to changing market conditions.
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 interest in expressing views in non-dollar crosses and 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 against other majors, driven by uncertainty over Canada’s budget, the size of the Carney government’s deficit, and questions about how the new US and Canadian administrations will work together. That said, the US dollar remains the dominant base currency in most commodities and currency trading.
GF: OTC interest rate derivative volumes have surged, nearly doubling for euro-denominated contracts and rising significantly for yen- and sterling-denominated contracts. 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 responses to 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 right-size their exposure to the US.
GF: Are clients’ expectations changing around reporting transparency, multi-currency liquidity, and access to customized derivatives products?
Larivière: Clients are seeking bespoke hedging solutions built on a full suite of derivatives products across asset classes. These customized solutions are tailored to their unique company requirements, allowing clients to express market views while hedging underlying exposures. In addition to the increased flexibility 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 that help clients navigate the uncertainty of operating global businesses across borders in an uncertain 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, though it remains unclear how deep the cuts will be. If yields continue to decline, we expect increased pressure on the dollar, leading to higher volatility. The FX market typically grows during periods of volatility; the shift away from yield-enhancement strategies toward a pickup in volatility should drive an increase in FX in 2026.
Another theme we are watching is the shifting regulatory landscape for digital assets. Regulatory changes that favor these assets will facilitate more interest and investment in the products.
