Your Currency Trade When Investors Take Cover

The storm of dire news from Europe is hurting risk-on currencies. Here's how to trade the cautious sentiment.

You can't really blame investors for being gun-shy, what with Greece close to default, Italy taking a rating cut, and European leaders at odds over how to deal with any of it.

The question is how to trade the new caution.

Amelia Bourdeau, director of foreign exchange at Westpac Institutional Bank, thinks risk-averse investors will be selling commodity currencies, and she recommends selling the Australian dollar against the U.S. dollar as a result.

"Moving forward, I see downward pressure on the euro," Bourdeau told CNBC's Melissa Lee. "It is susceptible to swings, but I think that overriding risk is going to hit the commodity currencies, which is why I like to be short Aussie dollar."

Bourdeau wants to sell the Aussie at around 102.50 and look for a move to 100.00 with a stop at 103.35.

You can watch the whole discussion in the video clip.

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