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Will the Dollar's Rally Continue?

Friday, 11 Mar 2011 | 8:41 PM ET
Stack of U.S. hundred-dollar bills
Stack of U.S. hundred-dollar bills

The dollar had quite a week, what with decent U.S. economic statistics and worries about upheaval in the Middle East. Can it sustain its run?

Andrew B. Busch, global currency and public policy strategist at BMO Capital Markets, expects the dollar to outperform the euro, he told Melissa Leetoday on the premiere of "Money In Motion." Europe still has to come up with a bailout plan, he said, and next week he expects the Fed will come out sounding a little more hawkish. Adding in the fact that we are in a "risk-off" environment which favors the dollar, Busch said, "Overall I'd like to take advantage of the euro rallying just a little bit more than this and sell it." Busch would sell a rally in the euro up to 1.3945, put a stop loss at 1.4040, and take profits at 1.34.

The Buck Stops Here
The final word from the currency pits, with CNBC's Melissa Lee and the Money In Motion traders.

Rebecca Patterson, global head of currencies and commodities for J.P. Morgan's private bank, noted that widespread expectations of an interest rate hike are already priced into the euro, so she is focusing on the dollar. "I'm watching the Fed language from the FOMC statements. If they even hint that they might not stay low as long as the market expects, the dollar's going to get a lift from that and the euro's going to go lower."

Todd Gordon, co-head of research at Aspen Trading Group, agreed that the dollar looks ready to rise. "I think you're right on," he said, suggesting that a stop loss could even be below 1.4040.

**Disclosures: Patterson, Busch, and Gordon have no disclosures to report.

CURRENCY FUTURES

Tune In: CNBC's "Money in Motion Currency Trading" airs on Fridays at 5:30pm.

"Money in Motion Currency Trading" repeats on Saturdays at 7pm.

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