Your Trade on Improving China Sentiment

Source: Wellington International Airport

China's GDP disappointed, but plenty of experts think China sentiment could improve. Here's how to play it using currencies.

Worried about whether China can avoid a hard landing as its economic growth slows? Amelia Bourdeau, director of foreign exchange at Westpac Institutional Bank, actually thinks sentiment on China will improve near term.

She wants to trade on the likely shift, but not by using commodity currencies - the typical go-to currency plays on China. Right now the New Zealand dollar, Bourdeau says, "is a cleaner way to play a constructive China recovery than the Australian dollar or the Canadian dollar," what with U.S. first-quarter earnings potentially buffeting the loonie and the Reserve Bank of Australia potentially cutting interest rates.

That said, New Zealand isn't without risk, notably the upcoming release of first-quarter CPI data, Bourdeau says. But in her view, that risk is creating a trading opportunity. Bourdeau told CNBC's Melissa Lee that CPI "is supposed to tick down, and that will lower the New Zealand dollar," making it possible to go long on a dip.

So Bourdeau wants to wait for that pullback and then buy the kiwi against the dollar at 0.8150 with a stop at 0.8030 and a target of 0.8450.

Rebecca Patterson, chief markets strategist for J.P. Morgan Asset Management, Institutional, agrees that buying on a dip makes the most sense, but she is concerned that worries about Europe could curb appetite for all risk assets.