We are in the middle of a currency war: Strategist

Volatility from Greece is good: Pro
Volatility from Greece is good: Pro   

There is a currency war going on—one in which the Federal Reserve is the least able to play, said David Woo, head of global interest rates and currencies research at Bank of America Merrill Lynch, on Friday.

The European Central Bank statement during a dinner last week regarding the purchase of more bonds is a strong signal it doesn't want the euro to go back over $1.15, said Woo during an interview with CNBC's "Squawk on the Street."

"You could argue that the U.S. got back on the street playing that game," explained Woo. "Now, the U.S. cannot tell others they cannot play this game."

Read More Europe shares close sharply lower on Greek fears

With inflation picking up and better performance from U.S. companies, the Fed has less of a reason to get engaged in this war at the moment, said Woo.

A woman walks past an exchange office in Moscow.
Vasily Maximov | AFP | Getty Images
A woman walks past an exchange office in Moscow.

As the deadline for a debt payment by Greece draws closer, the volatility of currencies has increased. The country is supposed to pay about 300 million euros ($329 million) to the International Monetary Fund on June 5, but creditors have been worried about Greece's ability to make the payment.

Woo added that the latest data show 5.6 billion euros leaving the Greek banking system for elsewhere—double the March figure. He added that this might force a showdown into the end of June.

Meanwhile, Wells Fargo's Scott Wren, also on "Squawk on the Street," said that the volatility was creating more of a chance to buy stocks.

"Volatility is going to hopefully cause more buying opportunities. Even in a worst-case scenario for Greece, which I don't think is going to happen, they are going to Band-Aid this thing and kick it down the road," said Wren.

Read MoreGreek talks 'progressing'…so where's the deal?

Woo said that his biggest worry is Asia, especially China. With the Chinese yuan one of the strongest currencies and Germany's exposure to China, there might be some problems for the euro.

"I think the euro will have an issue," said Woo. "German exposure is more than U.S exposure to China."