The Weak dollar going slide

The long slide is fanning inflation at home and playing a major role in the run-up of oil and gasoline prices everywhere.

-Everything made in America - from goods to entire companies - is near dirt cheap to many foreigners.

-Since oil is bought and sold in dollars worldwide, the devalued dollar has made the recent surge in energy prices even worse for Americans, leading to $4 gasoline in the United States. Analysts suggest that of the $140 a barrel that oil fetches globally, some $25 may be due to the devalued dollar.

-The loss of the dollar's purchasing power and international respect has some experts worrying that the euro might one day replace the dollar as the so-called primary reserve currency. And that could trigger a dollar rout as foreign governments and international investors flee from U.S. Treasury bonds and other dollar-denominated investments.
The Federal Reserve could prop up the dollar by increasing interest rates under its control. Increased yields would make dollar-denominated investments more attractive to foreigners. But that could undercut the already anemic economic growth in a frail U.S. economy rocked by soaring fuel costs, falling home prices, rising unemployment, and the lowest reading of consumer confidence in 16 years.

-Some of the dollar's decline depends on hard-to-measure factors, like the psychology of foreign investors.
When the U.S. economy is weakening, many investors stay away. The slide of the dollar has coincided with a long period of relatively low interest rates.