New GDP data will be released on Friday, and this strategist has a trading plan.
Investors have already gotten plenty of economic data to chew over, and now they can look forward to a GDP report on Friday.
Andrew Busch, global currency and public policy strategist for BMO Capital, has a trading game plan.
The consensus forecast calls for GDP to increase 3 percent, Busch told CNBC's Simon Hobbs, and if the number comes in close to that figure, he doesn't see much of a trade. But if the number falls short, Busch says, "then I want to buy the U.S. dollar - that's risk off - and sell the Swedish krona," since the latest Swedish economic reports were dismal.
On the flip side, if GDP comes in over 3.5 percent, Busch would go into a risk-on trade. "I want to buy Mexico because that's a country that's experiencing good growth," he says, not to mention interest rates around 4.5 percent. And he would sell the yen because Japan just came out with its first year-long trade deficit in decades, which is "taking out a lot of the oomph for the yen."
Busch wants to wait for a pullback and then buy the peso against the yen at 5.880 with a target of 6.285 and a stop of 5.785, just below a recent high.
"Anything associated with the U.S. is growing, and being able to export into the U.S. is helpful," he says.
You can watch the discussion on the video.
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