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A Treasury of Currency Clout

Monday, 2 May 2011 | 8:59 AM ET
U.S. Treasury Secretary Timothy Geithner
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U.S. Treasury Secretary Timothy Geithner

For clues to the dollar's direction, listen to Treasury Secretary Timothy Geithner - and his overseas counterparts.

Everyone in Washington is talking about the dollar these days. But mostly, you only need to pay attention to one person, says Andrew Busch, global currency and public policy strategist for BMO Capital. Sure, Fed Chairman Ben Bernanke is significant, Busch says, but Geithner's comments on the dollar last week really made traders sit up and start selling the greenback again.

The Money File
Who's really driving the dollar? Andy Busch, BMO Capital Markets, tells you who to listen to regarding the dollar, with CNBC's Melissa Lee and the Money In Motion traders.

Geithner has a counterpart in every major country, and one way to find a promising trade is if you find one of those counterparts taking a different tack on the local currency.

In Australia, Treasurer and Deputy Prime Minister Wayne Swan is that person.

When asked about the Australian dollar's remarkable strength recently, Swan seemed unperturbed, chalking up the Aussie's strength to a great economy and high commodity prices.

"When you see a policymaker in charge of a currency say hey, this is a good thing, you want to go for it," Busch told CNBC's Melissa Lee. He recommends buying the Aussie at $1.0775 with a stop loss at $1.0580 and a target of, yes, $1.1425.

You can watch the whole discussion in the clip.left/CNBC/Sections/News_And_Analysis/__Story_Inserts/graphics/__ICONS/icon_story_360_TV.gif1505000lefttruehttp://msnbcmedia.msn.comCNBC 360 TVfalse1PfalsefalsefalsefalseCNBC TVTune 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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