Yesterday, and perhaps the day before, I felt that the Yen, Euro and Pound were all controlled in a narrow range, with the Euro being sold down a bit in exchange for GBP on account of some weaker economic data in Europe.

But the biggest surprise to me was that the USD did not weaken significantly immediately after the release of the weak U.S. GDP report. My take is that traders sized up the situation as one where the Fed would still have to raise rates because of a bigger concern over inflation (than concern for economic weakness), but I am unsure.

The reason I think that the USD is particularly weak today is that there are news reports out of China that the authorities are getting closer to a decision to release Renminbi from dollars.

A look at the Euro, Pound and Yen charts indicates a flag pattern that is likely to break out " higher or lower " soon, i.e., within weeks. I believe there will be one more cycle of weakness for the USD before it reaches its low point of cycle, where trend may change from down to up. But that positive picture for the USD might not take shape until 4Q05.

So for today, I'm thinking that gold has to move higher, along with goldminer stocks, and equities, while opening strong, will end the week, weak.

On the early equity front, I note a considerable change in attitude (PR??) from last evening's take on Microsoft (NDQ: MSFT) first quarter report. Last night was distinctively negative, but WSJ/CNBC was saying that maybe MSFT came in as expected.

That might be good enough to hold off some selling at the open, which would permit a strong Dow open, but I don't think MSFT investors will be fooled here. Unless reports (both earnings and guidance) are strong, in this environment stocks tend to go only in one direction, and that's down.