Inflation and the $$

I'm a bit confused on the impact of inflation and the dollar. If inflation goes up, shouldn't that be good for the dollar (as inflation fuels rate increases?) ...or is there a larger driver that I'm missing here?

I would think high inflation leads to higher interest rates which leads to people buying more dollars and selling their local currency.

Thanks all!

There is a difference between eating wisely until you feel good and stop it, and eating with carless attitude until you end up in the hospital...Same applies with the economy...If the economy inflates, that's good, but when it over-inflates, usually it goes to the hospital and sometimes to the intensive care...At that time of over-inflation, nobody wants to own the currency although interest rates would be high, but the government are printing out lots of them during those times...


Thanks,

Nader

You should read some economic books about inflation.
The article about inflation is given here:
http://en.wikipedia.org/wiki/Inflation

fundamental analysis is a waste of time. that i can tell you .

Not if you want to do some carry trades!! Holding positions for longer term. I boils down to what kind of trader you are or would like to be!!