• 1-week expiry USD/CAD option implied volatility trades 9.15 early Tues

• That's up from 7.0 on Monday and is a new high since Feb. 4

• Comes after Trump said he intends to proceed with Canadian tariffs

• Deadline was extended a month to March 4 - now included by 1-week expiry

• 1-week USD/CAD implied volatility at 9.15 has premium of 1.0% of USD

• In break-even terms it's 144 CAD pips in either direction for a straddle

• Not yet as high as before initial Feb 4 deadline when it peaked 12.0

• Premium/breakeven at 12.0 implied vol was 1.32% USD/190 CAD pips either side
1-week expiry USD/CAD FXO implied volatility

(Richard Pace is a Reuters market analyst. The views expressed are his own)