Investors have flocked to foreign exchange trading over the past 10 years, and the venture capital community is ready to grab a piece of the action.

Two companies -- Currensee Inc. and Tradonomi LLC -- are angling for central spots in this emerging trading community, and several funds are placing pretty big bets on their success. Currensee has a social network for forex traders, while Tradonomi's move was to create a game-like user interface to make it easier for would-be fortune-makers and thrill-seekers to trade foreign currencies.

The British pound (CME: $BPY) hit $1.60 for the first time in more than half a year this morning, thanks to improved service company sentiment and an increase in mortgage approvals. A rise in consumer confidence in the United States increased risk appetite and lifted the pound, as well.

The news was good enough for a 0.5% gain for the pound against the dollar, a 0.6% increase relative to the euro and 1% against the yen (CME: /JY\M09).

The Fed's relentless policy of interest rate cuts is working like a charm. The dollar hit a record low against the Euro ($1.5057) and oil hit a record $102 in response -- up 325% since January 2001's $24. The record oil price has not yet found its way to the gasoline pumps -- but it will. If oil prices remain above $100, by this summer gasoline prices will top $4 a gallon -- or $80 for a 20-gallon tank. Back in January 2001, you would have paid about $1.59 a gallon -- so you've got a 152% price increase there.

What is going on here? According to the New York Times, producer inflation is up 7.4% -- the worst since 1981. The U.S. has pursued a weak dollar policy -- relative to the Euro, the dollar has lost 63.7% of its value since January 2001 when it traded at 92 cents to the Euro. And since oil is denominated in dollars, a weaker dollar translates into a higher oil price. That excludes the effects of political instability in oil producing regions -- Iraq and environs -- and rising oil demand in China and India.