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Whack-a-Mole Time in the Currency Markets

gavel and money
gavel and money

European leaders are scurrying from one crisis to the next, and it doesn't bode well for the euro, this strategist says.

Ever play whack-a-mole? It bears a disturbing resemblance to the way European officials have been dealing with each new crisis, says Rebecca Patterson, chief markets strategist for J.P. Morgan Asset Management.

Not surprisingly, the euro has been highly volatile this week, she told CNBC's Simon Hobbs. "It's just swinging around, but I don't think that Europe solved the problems longer term." So she is not enthusiastic about the single currency. "Any time you get the euro rallying on relief because the mallet's been brought out, I want to keep selling it."

The upcoming summit on euro zone troubles is unlikely to change much, Patterson says.

She doesn't expect any real resolution to the crisis until Parliaments return this fall and approve changes to the financial stability fund. So Patterson recommends selling the euro against the dollar any time it approaches $1.45, and look for a drop to around $1.40.

You can watch the whole discussion in the video clip.

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