The bottom line is super simple: like all product on a free market, US dollar’s value is determined by the amounts of supply and demand.
· If US dollars are abundant, then it makes those dollars quite cheap and easy to get. Consequently, interest rates will be low.
· On the other side, if US dollars are much less abundant, then it makes those dollars not so easy to get. Hence, interest rates will be higher, which means that it will be more “expensive” to purchase this product.
It looks super simple and it is… The balance between rates and US dollars is just a direct reflection of the worth value of the product. The immediate question is thus: what determines the stocks of US dollars? [...] Economic policy and trade deficit level [...] The idea is simple: an increase of the public debt generates “de facto” an increase in the offer of US dollars, which must directly translate into a certain loss in value: those US dollars would worth trivially less as their quantity is increased... | 
