Far From the Euro Zone, a Trading Opportunity

Source: Wellington International Airport

Once again, the euro is proving tough to trade. This strategist is looking elsewhere for opportunity.

You might have expected the euro to soar on news of the bank aid to Spain, but no such luck.

After a brief surge, investors started selling again on worries about the upcoming Greek election and disappointment at the structure of the Spanish aid.

With the euro still so confounding, Amelia Bourdeau, director of foreign exchange at Westpac Institutional Bank, is looking elsewhere for opportunities, and she sees a relative value trade on the Australian dollar and New Zealand dollar.

The Reserve Bank of New Zealand will be meeting Wednesday night, Bourdeau told CNBC's Melissa Lee, and while she does not expect an interest rate cut, "they are expected to warn that they could cut ahead in the future, should euro zone worries continue."

Bourdeau thinks that warning will weigh on the New Zealand dollar against the Australian dollar - and present an opportunity to sell the Aussie against the kiwi.

Sure, New Zealand may warn of a rate cut, Bourdeau says, but she thinks "the Reserve Bank of Australia will cut rates a couple more times, but the Reserve Bank of New Zealand will remain on hold for the rest of the year."

Bourdeau wants to wait for the New Zealand dollar to slip against the Aussie on the rate-cut talk, and then sell the Australian dollar against the New Zealand dollar at 1.2870, setting a stop of 1.2960 and a target of 1.2600.

You can watch the discussion on the video.

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