General outlook.(Analysis)

Pro Farmer, October, 2005

CURRENCIES: The U.S. dollar is at an impasse. While the daily U.S. dollar index chart shows a steady uptrend from the late-2004 low, the long-term charts continue to show the greenback has a long way to go to turn the overall trend up--and just get back to "par."

Investors are somewhat wary of the dollar with a growing U.S. trade deficit. The U.S. trade gap grew to the third highest level on record at $59 billion in August. But currency traders point to expectations for additional Fed interest rate hikes as a supportive factor for the dollar, along with expectations for steady economic growth. Talk of inflationary fears by the Fed are seen keeping a floor of support under the dollar for now.

A stronger dollar near-term wouldn't be all bad for ag...

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