Currency strategist: Investors should be buying the Australian dollar now

Calling it his "best trade," one currency strategist said investors should buy the Australian dollar now.

"The Australian currency is very undervalued at these levels," Patrick Bennett, foreign exchange strategist at the Canadian Imperial Bank of Commerce, told.

He said he expects the U.S. and China to come to a resolution on their trade tensions, which would leave the Australian dollar "very well positioned," he told.

The currency Down Under is often seen as a gauge of global risk appetite. In some cases, it is also viewed as a proxy for China, especially since the Chinese yuan doesn't trade freely.

Bennett predicted the Australian dollar will be trading at 77 or 78 cents to the U.S. dollar by the second half of 2019. The currency was trading at about 70 American cents as of Friday morning in Asia.

But the strategist advised investors to buy the AUD against the euro instead of the greenback for now. It is a "bit early" to buy it against the U.S. dollar, he said.

That is, Bennett explained, because the American economy continues to outperform its peers, and he sees the dollar starting to decline only in the second or third quarter of 2019.

Beyond the dollar Down Under, Bennett also recommended currency investors buy the Korean won because it is one of the few economies in the Asian region that has recently seen a strong inflow into domestic assets, especially bonds.

The Korean won will "continue to trade stronger from here," he said.

Source: CNBC

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