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Currencies That Could Win in the Greek Election

Friday, 15 Jun 2012 | 7:16 PM ET
The Greek national flag is seen flying above the parliament building on Syntagma Square in Athens, Greece, on Thursday, Feb. 16, 2012.
Bloomberg
The Greek national flag is seen flying above the parliament building on Syntagma Square in Athens, Greece, on Thursday, Feb. 16, 2012.

Ready for the Greek election this Sunday? Here are the currencies to watch.

Currency investors have been waiting for a second Greek election ever since the May round ended in disarray, and the moment is almost here. When voters go to the polls on Sunday, the outcome could lift some key currencies.

Rebecca Patterson, chief markets strategist for J.P. Morgan Asset Management, Institutional, thinks the results could well be negative for the European Monetary Union.

"I don't think EMU is going away," she told CNBC's Melissa Lee. "But Greece leaving or more turmoil - very possible." And of course, however the election turns out, expect a big reaction in the euro.

If you think the election results will be negative, Patterson suggests keeping an eye on safe havens. "If we have a bad case outcome in Greece or just a lot more uncertainty about Europe more broadly," she says, "you could see gold higher." In addition, she says, "I think the dollar, the yen, and the Swiss franc, despite central bank efforts to fight it, will also benefit."

Break Up the Euro?
The leader of the UK Independence Party calls for a euro breakup. Would the world be better off, with CNBC's Melissa Lee and the Money In Motion traders. Also, what to buy if Greece gets worse.

For investors looking for more out of the way opportunities, Patterson suggests watching the Danish krone. "This is a currency in Europe that is pegged to the euro, but there is a lot of pressure on it. A lot of people are putting money into Denmark as a safe haven. It's not traded as frequently, it's not terribly liquid, but if Greece gets worse, Europe gets worse, that's a peg that might break and that currency could appreciate a lot. So don't take your eye off that one either."

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