Stocks all around the globe fell on Friday mainly due to unemployment figures at home zooming to a five year high. Our nation lost 84,000 jobs, which raised new fears about America’s slowdown and the ripple it’s having around the world.
Meanwhile, it appears the ECB is growing more concerned about growth than inflation after leaving interest rates on hold at 4.25 percent on Thursday.
“Investors think the ECB is behind the curve,” explains international trader Tim Seymour.“ They believe Europe will soon have to cut rates to stimulate growth. As a result, “the dollar should benefit from the relative weakness."
How do you trade it?
Jeff Macke has recommended the PowerShares DB US Dollar Index Bullish in the past because he likes the chart action and thinks fundamentally the dollar will likely get stronger through the end of the year.
However, if you’re looking for an overseas trade, "I’m most focused on the places where interest rate sensitive stocks can rally if inflation looks to have peaked,” adds Seymour. That’s South Africa, India and Brazil.
”Also look at bellwether resource names such as Petrobras , Vale and Gazprom, ” he adds. “On a valuation basis they look attractive.
Read about all the companies in the Emerging Money Top 20, an index made up of 20 firms poised to profit from explosive global growth. These trades are compliments of Tim Seymour, Fast Money's favorite emerging markets specialist.
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Trader disclosure: On Sept 5, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders;
Seygem Asset Management Owns Gazprom; Seygem Asset Management Is Short (RSX) Puts
Seymour Owns (RIO)