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How to Trade Thursday's Central Bank Meetings

Wednesday, 3 Aug 2011 | 4:34 PM ET
European Central Bank
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European Central Bank

If you're waiting for the European Central Bank to give the euro a lift, don't hold your breath, this strategist says.

Thursday is a big day, with meetings of both the European Central Bank and the Bank of England. But not much may happen - and that could hurt the euro, according to Camilla Sutton, chief currency strategist at Scotia Capital.

"Probably the biggest risk isn't the BOE, which is likely to be a nonevent," she told CNBC. But she expects President Jean-Claude Trichet to be cautious, which "takes some wind out of the euro's sails."

Money In Motion: Trading Currencies in Turmoil
Weighing in on European currencies and insight on what traders should look out for ahead of tomorrow's Central Bank meetings, with Camilla Sutton, Scotia Capital, and CNBC's Guy Johnson.

Sutton recommends selling the euro against the British pound at current levels, around 87.40 with a target of 84 and a stop loss of 88.50.

"There's an awful lot of risk baked into the euro," Sutton acknowledges, noting that Trichet could make more news than she expects. But "There's a tremendous amount of risk everywhere, and the reaction to the move today in the Swiss franc is fairly dramatic. We didn't even get back to the highs in euro swiss. I think that highlights the headwinds facing central banks."

You can watch the whole discussion in the video clip, starting at 3:56.

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

"Money in Motion Currency Trading" repeats on Saturdays at 7pm.

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