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The Currency Trader's IMF Playbook

Friday, 15 Apr 2011 | 8:33 PM ET

It's been called the Superbowl for currency traders. The World Bank/IMF annual meetings are underway, complete with fresh ideas for trading strategies.

Rebecca Patterson, global head of currencies and commodities for J.P. Morgan's private bank, is attending the meetings, and she told CNBC's Melissa Leethat she has found widespread complacency about the level of the U.S. dollar.

"The world is accepting a weaker dollar." Patterson said, noting that the mood is sharply different from just six months ago, when Brazil said the weak dollar was creating a global currency war. "Intervention is continuing, but emerging markets are now saying they're more worried about inflation than exports so they're letting their currencies strengthen."

What does this mean for investors? Well, if you're holding the currency of a country with relatively high inflation, like Brazil, Mexico or Singapore, and wondering if you should sell, "I feel that this central bank shift suggest that you can hang onto your short positions in the dollar, long positions in these other currencies a little while longer," Patterson said. "I think we have room to run."

Andrew Busch, global currency and public policy strategist for BMO Capital, and Brian Kelly of Kanundrum Capital agreed. You can watch the whole discussion right here, starting around 6:35.

Money Match Up
The dollar demise continues as dollar devaluing pushes the greenback to multi-year lows. How to trade a weakening dollar, with CNBC's Melissa Lee and the Money In Motion traders. Also, a currency trader's playbook, from the annual meeting of the IMF.

*Accounts Managed by Kanundrum Capital are long euro futures

Accounts Managed by Kanundrum Capital are long (FXE)

Accounts Managed by Kanundrum Capital are long (FXY) puts

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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