What China Will Do to the Euro


With quantitative easing on hold and a European Central Bank that has spent a lot of firepower, the euro is losing steam.

The dollar has had a nice run lately, even against the euro, and Willie Williams, director of institutional derivative sales at Societe Generale, thinks the good times can keep rolling.

Now that the prospect of quantitative easing is, at a minimum, less imminent, "the dollar is no longer becoming the funding currency of choice," he told CNBC's David Faber.

On top of that, "now that you have more two way risk in dollar-China, a lot of the forces that were pushing the dollar lower are no longer in play," Williams says.

Bullishness on the dollar, in turn, could lead traders to start selling the euro against a variety of currencies, he adds. But Williams is going for the most liquid way to sell the single currency, calculating that dollar strength could easily last for the next month.

Williams wants to sell the euro against the dollar, entering right around 1.3050 with a stop at 1.3250 and a target of 1.2650.

You can watch the discussion on the video.

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