Your Currency Trade For an Improving Economy
Reports on the U.S. economy are improving, and this strategist has a way to play the rosier outlook.
Don't look now, but economic reports are starting to look a little rosier. For Rebecca Patterson, chief markets strategist for J.P. Morgan Asset Management, Institutional, that suggests a currency trade.
Patterson bought the Mexican peso against the dollar in December, and the trade has moved in her direction - but she thinks it has a ways to go.
"The central bank just kept rates at 4.5 percent and they're very neutral," Patterson told CNBC's Scott Wapner.
Also, "since this is a carry trade, it's also a play on the U.S. If you think the U.S. is going to do better, Mexico tends to do better, too."
For investors who are not yet in the trade, Patterson suggests entering around 13.23, but warns, "keep it tactical." She recommends a stop at 13.40 and she would look for a move to 12.90.
You can watch the discussion on the video clip.
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Learn more: The essential vocabulary for currency trading is on Key Currency Terms. Top currency strategies are broken down for you in Currency Class.
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