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How to Trade the Fed's Next Likely Move

Tuesday, 11 Sep 2012 | 8:52 AM ET
Mladen Antonov | AFP | Getty Images

Ready for a news-driven week in currencies? This strategist has a trading plan.

It's shaping up to be an eventful week in the world of currencies, with a German court and the FOMC expected to rock the market. Here's a way to trade all the news.

First up will be a ruling from the German constitutional court on the legality of the euro zone bailout. (Read more:German Court Won't Delay Bailout Fund Ruling)

Still, "the biggest event of the week is clearly the FOMC announcement on Thursday," says Amelia Bourdeau, director of foreign exchange at Westpac Institutional Bank.

What's Your Best Currency Play?
Currency traders are awaiting the Fed's decision on QE3, and the German constitutional court's ruling on the legality of the European rescue fund, with Amelia Bourdeau, Westpac Institutional Bank.

She expects Fed Chairman Ben Bernanke to announce a new round of quantitative easing, and that, she told CNBC's Melissa Lee, will lift the Australian dollar. "It's a high-beta currency," she says, so she's looking for an outsized reaction to the Fed's likely move.

Bourdeau wants to enter the trade at 1.0340, setting a stop at 1.0220 and a target of 1.0600.

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