The Other European Currencies Headed South: Strategist

Thursday, 10 Nov 2011 | 3:17 PM ET

The euro zone's problems are spilling over to its eastern neighbors, this strategist says.

Say what you will about the euro's ups and downs, but it's been remarkably consistent relative to the S&P 500. Marc Chandler, global head of currency strategy at Brown Brothers Harriman, says the correlation today is just above 80%, "as high as it's ever been."

Chandler recommends selling the euro on a bounce, at about 1.3650, with a stop at 1.38 and a year-end target near 1.30. And he's concerned about other currencies too.

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"We want to focus on those eastern European countries," Chandler told CNBC's Scott Wapner, adding that they are "terribly exposed to western Europe, directly through the economy, and as the banks in Europe raise capital, they sell off or reduce their loans to eastern Europe."

The Hungarian forint, for one, was near an all-time low today.

You can watch the discussion on the videotape.

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