Why is the weakening of USD?
- IMF bailout of Ukraine requires USD to be strong. However, bond holders refused to write down debts in Ukraine, thus may trigger a potential Fed rise of interest rates in December. (http://www.rferl.org/content/imf-gives-ukraine-loan-after-strong-start-reforms/27164015.html)
- September FOMC meeting, Fed decided to keep interest rates low. A higher interest rates may depress bond prices and trigger a selldown. USD will strengthen and China will benefit due to better export numbers. Will result in lesser export for U.S, thus decreasing employment rate.(http://www.theguardian.com/business/2015/sep/23/the-fed-must-ignore-accusations-of-dithering-over-interest-rates)
- Weakening of USD could be a result of QE 4, or a continued lower interest rates environment in order to boost bond prices, maintain inflation rate and maintain the stock market.
