Your Big-Picture Currency Trade
Big economic themes point to a trade on growth, this strategist says.
China's latest GDP report disappointed more than a few currency investors, but Camilla Sutton, chief currency strategist at Scotia Capital, is focused on the big picture.
"It's interesting. We had disappointing news out of China in terms of their GDP," but that doesn't tell the whole story, she says. "Almost everybody's pointing to the fact that January and February was where the weakness was," and March data actually came in stronger than expected, she told CNBC's Scott Wapner.
Good news out of China is good news for the Canadian dollar, Sutton says, and she thinks the loonie could also be helped by respectable growth, improving employment data, and the likelihood that the Bank of Canada's next pronouncement will be somewhat hawkish.
Conditions are very different on the other side of the world, she says. In Europe, "certainly sentiment is changing and turning more negative there," what with worries over the Italian and Spanish banks and more.
So Sutton thinks that selling the euro against the Canadian dollar "makes a lot of sense." She wants to enter the trade right around current levels, at 1.3060, with a stop at 1.3155 and a target of 1.2880, close to the lows seen in January.
You can watch the discussion on this video.
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