Time to Bet Against the Dollar: Strategist
Currency investors are starting the new year in a decidedly good mood, and that's giving one strategist trading ideas.
"Where we are starting 2013, I think a lot of the uncertainty has been taken off the table," said Willie Williams, a director in institutional derivative sales at Societe Generale. "Therefore, the need for the dollar to be a safe haven asset has been reduced."
That's a problem for investors who are long the dollar, since if Williams is correct, they are unlikely to reap the benefit of any dips in risk appetite. Instead, he said, the dollar is going to be trading on other factors—like relative interest rates—and on that score, there are better opportunities.
"The Fed has been very explicit that until we meet certain targets in regards to growth and employment, they're going to keep interest rates at a low level for longer," Williams told CNBC's Melissa Lee. "In the interim, yields in the euro zone are attractive."
So Williams wants to buy the euro against the dollar on a dip, entering a trade at 1.3200. He recommends setting a stop at 1.3000 and a target of 1.3600.
Tune In: CNBC's "Money in Motion Currency Trading" airs on Fridays at 5:30pm and repeats on Saturdays at 7pm.
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