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Your Currency Trade on the Jobs Report

Gonzalo Azumendi | Age Fotostock | Getty Images

It's that time again - time for the nonfarm payroll report.

What's exciting this month is that forecasts are all over the map - even though this Friday's report will be the first since November not to have unusual events like Hurricane Sandy having a significant influence on the data.

"I think it will be a slightly better read on the economy," says Michelle Meyer, senior U.S. economist at Bank of America Merrill Lynch. She is forecasting job growth of about 130,000, slightly below consensus forecasts.

Amelia Bourdeau, director of foreign exchange at Westpac Institutional Bank, is also watching the payroll number closely, and she has a playbook for trading the report.

If job growth comes in below the consensus forecast of roughly 155,000, Bourdeau told CNBC's Melissa Lee she wants to buy the dollar against the Norwegian krone on the theory that risk appetite will shrink. But she believes a figure close to the consensus forecast is more likely. That would probably lead the Fed to continue its quantitative easing program and boost investors' risk appetite, so she thinks the best trade on the payroll report is to sell the dollar against the krone.

(Read more: Quantitative Easing: CNBC Explains)

Bourdeau recommends entering the trade at 5.5100, setting a stop at 5.5750 and a target of 5.3500.

Why the krone? After all, the Australian dollar, another commodity currency, is a more common proxy for trading risk appetite.

"Australian dollar's been very volatile," Bourdeau explains. She also wants to steer clear of the euro, which can be affected by risk sentiment, because she is worried about how it has been trading against other currencies. In Norway, however, "the central bank is a little worried about the strength of the currency but not very worried," she says. "In all this currency devaluation, someone has to take the strength. I think the NOK can handle it."

Andrew Busch, a CNBC contributor, agrees. "If you're going to go risk on, or if you're going to go with that kind of momentum, if you're going to pick something besides the euro, some of the Scandis are a good way to do it," he says.

Tune In: CNBC's "Money in Motion Currency Trading" airs on Fridays at 5:30pm and repeats on Saturdays at 7pm.

Learn more: The essential vocabulary for currency trading is on Key Terms Dictionary. Top currency strategies are broken down for you in Currency Class.

Talk back: Tell us what you want to hear about - email us at moneyinmotion@cnbc.com.