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Euro May Be Stuck, But This Trade Is Not

cancun mexico
Hisham Ibrahim | Getty Images
cancun mexico

Despite the drama, the euro is virtually unchanged from its January level against the dollar. This strategist has a trade that should see more action.

You would think that with all the deadlines, crises, and ultimatums, the euro would have had a wild ride this year. But...you would be wrong.

The euro started the year at 1.3380 against the dollar, and it's now trading around 1.3370, says Willie Williams, director of institutional derivative sales at Societe Generale. "There's been a lot of pain to come out of this trade," he told CNBC's Simon Hobbs.

That's why Williams prefers a trade that should have a bit more movement. Specifically, Williams recommends selling the Swiss franc against the Mexican peso.

"This trade has roughly a zero correlation with euro-dollar," he says. Also, "as the European Central Bank continues to cut rates, there is a risk that euro-Swiss will trade lower, and the Swiss National Bank will step in and raise the floor, weakening the Swiss franc."

As for Mexico, Williams likes the fact that interest rates are well above Swiss levels, and he expects Mexico to benefit from the gradual U.S. economic recovery. The central bank's recent moves to prop up the peso should also help, he says.

Williams wants to sell the Swissie against the peso at 14.800 with a stop at 15.000 and a target of 14.300.

You can watch the whole discussion on the videotape, starting at 1:35.

Tune In: CNBC's "Money in Motion Currency Trading" airs on Fridays at 5:30pm and repeats on Saturdays at 7pm.

Learn more: The essential vocabulary for currency trading is on Key Currency Terms. Top currency strategies are broken down for you in Currency Class.

Talk back: Tell us what you want to hear about - email us at moneyinmotion@cnbc.com.