I thought it of interest to see what surveys of forecasters indicate about two questions being asked: Is a dollar collapse imminent -- Martin Wolf is skeptical, while others [0] are convinced the end is nigh -- and is a double dip recession likely? I take a look at the messages conveyed by FX4casts.com and the WSJ October survey of forecasters.

The Dollar

First, let's take a look at what a survey of approximately 50 banks and financial firms indicates, for the value of the dollar (Fed broad index) and the euro/dollar exchange rate.

Figure 1: Log dollar index (broad) (blue), mean forecast (red squares), high and low forecasts (95% bounds) (teal +). Forecast dates typically pertain to 4th Thursday in each month. NBER defined recessions shaded gray, assumes last recession ends 09Q2. Source: Federal Reserve via St. Louis Fed FRED II, FX4casts.com, NBER, ...

Employers cut 539,000 jobs in April, the lowest total in six months, but the Labor Department said the unemployment rate still soared to 8.9%, from 8.5% in March. While some analysts viewed the latest report as a sign of a nascent economic recovery, the unemployment numbers are almost certain to head higher before the recession is declared over.

Last week’s report could have been worse if the numbers hadn’t been held in check by a burst of federal government hiring of temporary workers to prepare for the 2010 Census.

The report was also skewed by the way the government categorizes the unemployed.  As Money Morning previously reported, if laid-off workers who have given up looking for new jobs or have settled for part-time work are included, the numbers skyrocket.

In fact, if the latest unemployment report had included those workers, the rate would have soared

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With the economy in a tailspin, the U.S. Federal Reserve policymakers will today (Tuesday) almost certainly cut the benchmark Federal Funds rate from its current 1.0% to 0.5%.

So the question no longer seems to be whether the Fed will ease, but whether the move will make any difference.

The Fed has been hamstrung by a credit-market double-whammy: borrowers who are in limbo due to fears of soaring unemployment, and banks that have turned off the lending spigot. Even so, a U.S. economy facing its worst financial crisis since the Great Depression demands the central bank take decisive action.

That has led to a strong undercurrent of opinion among analysts that the Fed will pursue other measures to spark a moribund U.S. economy.

“We look for the accompanying statement to highlight that the main nexus of policy in the coming months will be quantitative easing operations,

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The U.S. trade deficit grew in October as both the volume of oil exports and our trade deficit with China surged to a record highs. A widening deficit means the United States will not be able to rely on trade to help pull the economy out of what may be the longest recession in the post-World War II era.

The U.S. trade deficit grew to $57.2 billion in October, a 1.1% increase from $56.5 billion in September. Imports fell 1.3% to $208.9 billion, but exports fell even further, dropping 2.2% to $151.7 billion - the lowest level since January.

On reason for the reason for the larger deficit was more lopsided trade with China. The trade gap with China increased to a record $28 billion, up from $27.8 billion in September. China last year supplanted Canada as the largest source U.S. imports. Since joining the World Trade Organization in 2001, China has

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