If they raise interest rates, they increase the interest rate differential which makes owning the currency more attractive.

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Another negative factor for the U.S. dollar remains the interest rate differential outlook or the official monetary policy rate.

FORBES: Outlook 2012: Can U.S. Dollar Bulls Keep Hold Of The Reins?

Because they make their money on the interest rate differential.

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With the U.S. Federal Reserve calling for near zero interest rates through mid 2013, that leaves the U.S. dollar on the bearish side of an interest rate differential play.

FORBES: Outlook 2012: Can U.S. Dollar Bulls Keep Hold Of The Reins?

In recent years the U.S. has improved relative to Japan in terms of productivity and the terms of trade, and the interest-rate differential has widened in America's favor.

FORBES: Sell yen, buy dollars