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Weekly Financial Review

A dollar may not be worth what it once was. And the long-term future of the greenback remains murky, thanks to huge budget deficits and the potential for inflation to run rampant thanks to government printing presses running non-stop. But right now the buck is the last man standing among the world's big three currencies.

Of course, the dollar has won the "Survivor - Monetary Edition" competition because our problems aren't as bad as those in Japan and Europe. The euro tested its lows last week as the zone appeared ready to fall apart over its financial crisis. Debt was also the issue in Japan that caused a rating agency today to downgrade the yen. Japan is the world's leading debtor, though that policy hasn't helped the country out of decades long stagnation.

The dollar, meanwhile, gained as the safe haven of last resort as nerves frayed, causing a pullback of almost 8% on the Dow this month. That caused the currency to test its highs for the year.

Over the past three weeks the correlation between stocks and the dollar remained a strong inverse – as stocks fall, the dollar rises, and visa versa. Now, while the news from Europe is a bit brighter, the question is whether the dollar will be less about safety, and more about opportunity, allowing stocks to rally if the dollar continues to firm.

If it can, other risky investments, including commodities, may be able to rally on their own merits, or at least how international money managers percieve those merits.

Senior Editor Bryce Knorr first joined Farm Futures Magazine in 1987. In addition to analyzing and writing about the commodity markets, he is a former futures introducing broker and is a registered Commodity Trading Advisor. He conducts Farm Futures exclusive surveys on acreage, production and farm management issues and is one of the analysts regularly contracted by business wire services before major USDA crop reports. Besides the Morning Call on www.FarmFutures.com he writes weekly reviews for corn, soybeans, and wheat that include selling price targets, charts and seasonal trends. His other weekly reviews on basis, energy, fertilizer and financial markets and feature price forecasts for key farm crop inputs. A journalist with 38 years of experience, he received the Master Writers Award from the American Agricultural Editors Association.