If I understand the reason correctly, its this:
1) Countries send tons of stuff here and get tons of $ in return.
2) The generally need to change those dollars into their native currency in order for it to be useful in their home country.
3) This results in many people wanting to sell dollars, hence the decline in its price relative to other currencies.
Hard to argue with that really.
In the past, that situation has been somewhat ameliorated by the $ being the world currency - which diminishes the need to sell dollars since they're useful on the world market.
But widespread acceptance of the Euro has hurt that to some degree.
Also, aren't they talking about trading oil in Euros now on some Arabic exchange?
Except it doesn't happen.
Over the past few decades the balance of payments went back and forth from capital to current, inflation went up and down, and the dollar's exchange rate went up and down. [poster's note to the internet-challenged: right click on each of the three links and open them in "New Window" --and compare] There's no one trend that had any reliable predictable relationship with any of the other trends. Buffet likes getting his name in the paper and getting Democrat politicians to hint about making him some kind of economic king pin or something. He likes it so much that he'll make promises to gullible investors that if they bet on Bush being a miserable failure they'll make a fortune.
Here's an actual proven case where some people actually believed Bush's trade policies were bad enough to put their money where their stupidity was. They lost a billion dollars.
