Your Currency Trade on Copper's Rise
'Tis the season for a major commodity currency to do well, this strategist says.
Copper had a nice run on Monday, and MacNeil Curry, head of FX rates and technical currency strategy at Bank of America Merrill Lynch , wants to play the move using currencies.
Arguing that copper's move points to a generally robust appetite for risk assets, Curry told CNBC's Scott Wapner that in the currency markets, "you should see a lot of emerging market and commodity type names start to outperform a bit against the dollar."
Specifically, Curry has his eye on the Australian dollar, since Australia is a major copper exporter. Also, he says, "from a seasonal perspective, the month of April is the strongest month of the year for the Australian dollar historically."
He is considerably more cautious on the euro, however, noting that European bank stocks are weakening and interest rate spreads between German and Spanish bonds are widening. "The concerns for the euro zone are not necessarily going away, and could come back to the foreground," Curry says.
With the euro-Australian dollar pair "banging up against year-and-a-half range highs," Curry says, he thinks the time to sell is now. He wants to enter the trade at 1.2850 with a stop at 1.3050 and a medium-term target of 1.2200.
You can watch the discussion on the video.
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