The US credit and housing crisis, oil, food prices and the USD continue to be central drivers impacting the direction of economies worldwide. The USD's weakness has been sustained due to US economic woes and a series of sharp interest rate cuts which commenced since September. The Fed's switch on focus from saving the US economy's growth to countering rising inflationary pressures points towards an impending USD trend reversal. The G-10 has also made it clear that a stronger dollar is important for strengthening the global economy. Over the last 12 months the major driver of rising oil prices, and hence rising food prices, has been the weakening dollar, so a stronger dollar can be expected to have a short-term effect of reducing crude oil and food/commodities prices. No doubt that USD shorts will start to close positions once they believe that an upward trend is in place, further strengthening the greenback. Oil speculators will also move quickly to reduce exposure should crude prices start to decline. The recent shrap rise in fuel and agricultural commodities prices have caused angst for traditional hedging sources (e.g. fuel and agricultural traders, etc.). The weakening of global economies, particularly the US, will not bode well for OPEC in the long run and no doubt it will need to react near-term to ensure that US demand does not decline precipitously. Most OPEC members understand that one should not bite the hand that feeds it. Investing in energy makes sense, but exploration and drilling companies are more attractive than refineries and less sensitive to price swings. A strengthened USD, coupled with a decline in oil prices, will have a direct impact on agricultural commodities and food prices. One should be cautious with gold since a USD trend reversal will have an averse price impact. In Europe, the US and Japan (as well many other countries in the world) their current inflationary pressures are external in nature and an easing of these pressures will bode well for local economies and capital markets. Expect a continuing gradual improvement in the US economy, albeit with more bumps along the way. Emerging market currencies will probably remain attractive.