The purpose of repurchasing government bonds is to increase the liquidity of the market and increase the currency. Treasury bonds were originally issued to reduce market liquidity. Of course, the main purpose of national debt is not to regulate liquidity. In other words, there are fewer dollars circulating in the market. From this perspective, the dollar index will rise.

The purpose of issuing treasury bonds is to make up the fiscal deficit, and the purpose of repurchasing treasury bonds is to increase liquidity. The reason why the government bond purchase plan of $300 billion was slowed down was because the recent economic data of the United States showed that the recent economic recovery in the United States was good, and there was no need for more liquidity to cause inflation for the time being.

Risk preference is the degree of investors' aversion to risk. Because of the following statement, investors are more inclined to increase their investment proportion in risky assets and reduce the weight of their risk-free income assets. The decline in the dollar index is this reason.

If the Fed slows down its purchases, the dollar injected into the market will not increase in the short term, so the dollar should appreciate.