An Unlikely Trade on Greek Drama
With the Greek drama continuing to unfold, this strategist has an out-of-the-way trading plan.
It's exciting watching the Greek political drama unfold - if you have a strong stomach - but in the meantime, markets are on tenterhooks. You could trade the euro to take a position on Greece, but the strategists at Royal Bank of Scotland have another idea: trading the dollar against the Swiss franc.
The political turmoil in France and Greece "has USD/CHF in line with our short-term “fair value” model," they wrote in a note to clients, and things could easily get better. They expect the Swiss National Bank to stick to its policy of pegging the franc to the euro - and that "could prevent CHF gains in light of increased Euro-area woes" if the upheaval continues to weigh on the single currency, as it has been today.
At the same time, the strategists are bullish on the dollar, given a series of relatively positive economic reports.
All in all, they believe the dollar could reach 0.9950 against the Swiss franc.
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