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What to Trade While Spain Stalls

Tuesday, 25 Sep 2012 | 8:01 AM ET
Syndney, Australia
Maisant Ludovic | Hemis.fr | Getty Images
Syndney, Australia

Spain has been stalling in asking for a bailout, and this strategist sees the euro stalling as well — so she has another trade in mind.

When the European Central Bank announced its bond buying plan, expectations rose that Spain would soon ask for a bailout. Good thing traders weren't holding their breath, since Spain has yet to request aid.

Amelia Bourdeau,director of foreign exchange at Westpac Institutional Bank, thinks it's just a matter of time. "The market has priced in that Spain will get a bailout," she said, adding that once the country holds regional elections and releases its new budget, an aid request will probably be forthcoming. In the meantime, she sees a trade she likes on the other side of the globe.

"I prefer relative value because I think euro's stuck in a trading range," she said. Specifically, Bourdeau wants to sell the Australian dollar against the New Zealand dollar.

The Reserve Bank of Australia will meet Oct. 1, and Bourdeau told CNBC's Melissa Leethat she expects an interest rate cut to ensue, which would weigh on the Aussie.

So she wants to enter a short Aussie trade at 1.2700, with a target of 1.2540 and a stop at 1.2770.

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