Trading in currency markets and commodities is not for the faint of heart. But Rebecca Patterson, a Managing Director and Global Head of Foreign Exchange and Commodities for J.P. Morgan Wealth Management, has an enviable track record.

She recently joined the Milken Institute Associates for a private breakfast to reveal the science — and the art — of staying one step ahead of world currency trends.

Patterson noted that over the last six to nine months, the dollar has been weakening. When consumer confidence ticks upward, she explained, Americans tend to buy foreign goods, creating a bigger current account deficit. And as risk appetite returns, investors are gradually pulling out of Treasuries and money market accounts. Right now they are seeing opportunities in emerging markets, so capital is leaving the United States.

"As long as the world keeps getting better, I think the dollar stays under pressure," she remarked. "But it's important to remember that sentiment is still very fragile."

Patterson discussed which currencies she favors for the next 12 to 18 months, including several in emerging Asian nations and commodity-based economies.

Patterson feels that OPEC learned a lesson last year: By raising oil prices too aggressively, they ultimately shot themselves in the foot. She feels that current levels of $70 to $75 per barrel represent a "sweet spot" for OPEC, returning oil-producing nations to surplus without harming global demand and recovery.

In an interaction question-and-answer session, Patterson also discussed natural gas prices, the U.S. deficit, inflation and the impact of stimulus spending by world governments.

This event was open only to Milken Institute Associates. To join, contact Mindy Silverstein, director of the Associates, at (310) 570-4634 or msilverstein@milkeninstitute.org.

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