Your Safe Harbor Trade for an Eventful Weekend

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Labor Day weekend looks to be full of event risk, and that's pointing this strategist to a trade.

Back in mid-August, Rebecca Patterson, chief investment officer at Bessemer Trust, told investors to buy the dollar against the yen.

Signs were appearing that Europe would not have a meltdown after all, U.S. economic indicators were looking a bit better, and investors were unwinding long-duration positions in Treasuries. The result: downward pressure on Treasury prices and upward pressure on Treasury yields.

That environment, Patterson said, is typically "good for the dollar against some currencies, specifically the yen," because the higher U.S. yields relative to Japanese yields induce investors to sell the yen and buy the dollar. Sure enough, investors were piling into that trade.

But - you knew there would be a but - Patterson worried that investors were viewing the trade as too much of a sure thing.

"I'm looking to fade this," she said, recommending that investors sell the dollar against the yen.

Two weeks later, Patterson's trade has panned out in a big way. The dollar has moved from 79.65 against the dollar to slightly over 78.20.

So she wants to close it out.

"I would look to take profit today on this trade, given the long weekend and the myriad of event risk in the week and weeks ahead," she told me.

Step lively.

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