These are the 2 biggest reasons for a weaker U.S. dollar

Here is my hypothesis. What you see with USD rout and stock market drop, is the result of Chinese official decision to become super power #1 now. Chinese have been preparing and planning this event for a long time.
Chinese government is cashing in their 2+ trillions USD based assets such as treasury bonds and US stock market holdings and buying EURO, GBP and JPY. USD rout you see now is just the beginning. Chinese government want to destroy the confidence of world investors in USD. They want to make USD so weak that investors will hold their assets in other currencies. When USD becomes real weak, inflation will come very fast. And then FED will keep increasing interest rate to support USD. Eventually a recession will come to USA.
Unemployment will increase and US companies will start to go bankrupt. Chinese think that under all the uncertainties under clueless Trump and his short sighted cabinet, time is now to destroy US supremacy. They see that world opinion is against US on account of protectionism. Chinese kill many birds with this move. Europe because their currency appreciating so much would not effectively be able to compete against Chinese in the world markets. Eventually Chinese will buy European and British companies which will be used to buy cheap and mission critical American assets.

Despite his low popularity, Trump seems to be doing something smart...30% tariffs on Chinese solar panels is a brilliant move....After all, China has cheap labor but no talent to invent new products or discover something new.
China and India have one common burden..their hefty 'do nothing' population. That will drag the nations down faster than any tangible progress they make.

Best analysis i read

I opined that it is just window dressing to make the trade balance more "equitable". Trade balance between US and China has always been an issue. Now we have Germany added into the picture. Trump has made it known without a shadow of doubts that he is unhappy about this and will take immediate steps to address this imbalance (hence his trade protectionism stance).

The Chinese and German know they have to give and take this time given Trump no-nonsense no-negotiation hard stance and therefore they will have to conduct market operation (with the cooperation of the US counterpart) to make USD weak while Chinese Yuan and EUR stronger in comparison. This is just a matter of "accounting" to make the trade figure more balanced and equitable.

That is why on one hand Trump want a strong USD (as a sign of his capable leadership) but on the other hand, also want a weak USD (which is good for trade). There is no conflict. Long term, he want a strong USD. In the short term, until the trade balance is a non-issue, he want a weak USD. So all the trade partners are playing their parts to make USD weak while their currency strong.

Go look at the exchange rate chart of USDCNY. Chinese Yuan was almost at its weakest (6.9 yuan for 1 USD) against USD on Dec 2016 when Obama is still in office. When Trump become president on Jan 2017, IMMEDIATELY Yuan start to strengthen against USD till today it stands at 6.28 Yuan for 1 USD. The trend of a strengthening Yuan weak USD under Trump administration is undeniable and clear. Take a look at the chart and you can see it very clearly.

It is all about window dressing to make the trade balance more "equitable".

Since the Chinese de-peg Yuan from the USD in 2005, they have allowed Yuan to float within the range of 6 - 7 Yuan per USD. At its free-float "peak" rate of 6.9 Yuan on Dec 2016, Yuan has appreciated much and today almost "touching" the 6 Yuan bottom range. I suspect the Yuan will hold steady at 6.25 which is very close to today's rate of 6.28. That is why Trump come out last week to voice his long term preference for a strong USD given that now his wish for a weak USD (against Yuan) to address the trade imbalance has more or less been achieved with the cooperation from the Chinese side.

I do not think it is about window dressing. USD has weakened by some 15 % since beginning of 2017. And yet trade deficit has gotten worsened. I have been looking at US trade (goods) deficit figures for at least last 20 years every month and it always has been between 45 and 60 billions per month until Trump became president. Last month it was whopping 71+ billions dollar. With weaker dollar goods trade deficit should be decreasing. The fact is that USA does not have much in terms of goods to sell anymore. All the manufacturing has gone abroad. We practically make nothing that world wants to buy except weapons.

There are different school of thoughts regarding this trade deficit figure under Trump administration. I am not saying which school is right or wrong because I am not an expert economist. I am just presenting what some economist is saying. Look at the attached article. This guy say that the trade deficit is a result of net capital inflow as a result of growing US economy.

And going by my personal experience of what I have read and see in the news, indeed there are a huge flow of capital seeking cheap investment going into US in expectation of continuous US economic growth. This reverse flow back of capital into US has been ongoing for the last 2 years at least. And we are not even talking about US companies bringing back their overseas profits to US as a result of tax incentives. When that happens, the net capital inflow will be even be larger.

https://www.forbes.com/sites/salvato...my-is-booming/

Nothing is going to stop China or indeed India from surpassing the US in economic strength in the next 20 years. Probably important to prepare for that reality and its consequences.