The euro got a bit of a lift on talk of a new grand plan, but this strategist says it's an opportunity to sell the single currency against another.
Not a bad way to kick off a new week, with the euro riding higher on talk of fresh ideas from euro zone leaders on the debt crisis. Unfortunately, the good times won't be here for long, says Valentin Marinov, a currency strategist at Citigroup.
For starters, Marinov says, the euro zone leaders seem to be focused on a new plan for the strongest countries in the euro zone - and that would leave Greece, Italy and others out in the cold. "Chances are also that the push for EU treaty changes needed for the creation of broader fiscal union could face some stiff opposition by various euro zone and EU countries," he says. "In turn, this could mean that ECB support for the beleaguered euro zone bond markets may not be as forthcoming as investors are hoping." Marinov is much more bullish on the Canadian dollar, since Canada has huge trading exposure to theU.S., which is exhibiting resilience "despite the intensifying headwinds out of the euro zone." If commodity prices rise as a result of global growth, that would help the loonie as well, he says. Canada also scored well on the CitiFX Scorecard, which measures economic surprises and other factors.
You got it: Marinov wants to sell the euro against the Canadian dollar. Your move.
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