ONE OF THOSE DAYS

Actually, Wednesday turned out to be anything but an ordinary day. The equity market reversed course after a negative opening only to surge ahead before closing on the day's low. The dollar was mercilessly beaten to a pulp and commodity prices for their part went screeching skywards. Just another day of trading insanity for anyone trying to make sense of it all!

As we search for logic behind some of the heavily interwoven movements, there are elements to be found. Despite having raised the issue of increasing interest rates here in the United States, Fed chairman Bernanke is by everybody's definition quite some way off pulling the trigger. Elsewhere in the world, central bankers are throwing the issue around like a hot potato. Even Britain's top central banker this week said they shouldn't overlook the issue.

From anyone's present perspective, by admission the last central bank to raise rates will most likely be the Federal Reserve. And so the dollar has become the poor in town, playing second fiddle to every other currency under the sun.

Meanwhile, occasional snippets of economic data keep reminding us that the economy is on the move. A glacial movement it may be, but look at the landscape they left permanently etched behind. These pieces of evidence are building up momentum for other nations' currencies and worse still for the dollar is the fact that evidence of a recovery for corporate earnings in the U.S. is lifting the global barometer but as it does is weighing on the dollar.

One wonders how this pattern might continue under less favorable economic circumstances. Typically the dollar has performed well as risk appetite fade. In the final hour of trade a downgrade on Wells Fargo, the conglomerate mortgage banker that had surprised analysts with strong earnings in the morning, sent equities spinning. The analyst said that the improvement was not to be found in improving business conditions, moreover was connected to mortgage servicing fees. WalMart also hit the skids when it promised trading conditions would be tough over the winter.

Will the dollar curry favor as a result of this evidence of domestic weakness or will investors simply consign the U.S. economy to an untouchable state and favor assets abroad?

The euro closed above $1.50 for the first time in 14 months and was firmly entrenched there overnight in the Asian session.

The Fed's beige book regional survey of activity around the country was once again a dour report. Credit demand and loan quality deteriorated while there was little evidence of price pressures and activity saw stabilization and further moderation. It's hardly a recipe for a surging rebound and one that creates the conditions for a pregnant pause in monetary policy - once again a detractor from the appeal of the dollar.

Energy prices surged to another one-year high boosted by the fall in the greenback and after a drop in gasoline inventories. The 2.21 million barrel decline was twice the forecast amount and served up a move to above $81 for the price of crude oil.

As our very own Sean Brodrick told Bloomberg News today, "oil is moving higher because the dollar is going lower. The dollar's drop is telling people who buy crude oil as an alternate currency that oil prices are going to continue to rise. It's also giving energy stocks a boost." Sean and the Jurojin Weekly team urged readers to buy heating oil futures earlier this week. In just 24 hours that trade reached its first profit target banking readers who followed that play a handsome $2,520 per contract gain.

On Tuesday, Bloomberg reported that investors had bought significant amounts of crude oil put options expiring at the end of this year as investors bet on a swift reversal in energy prices. In our book, that's just a little premature.

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