Mike, interest rates are dropped to stimulate the economy. A major (and most often intended) side effect is that the currency drops when compared to others. With the US dropping interest rates, the value of the US currency has dropped when compared to other major currencies (yen, euro, etc).
This difference makes imports more expensive, makes internally produced goods a better "value" in the market place, and drives job growth and economic activity within the country. The lower interest rates make it easier for companies to borrow to finance expansion of factories to support this new internal demand.
Once other countries also drop their rates, it makes it harder for these benefits to occur, as all things stablize back to their more natural levels. Japan has attempted to play this game for years, with interest rates approaching zero percent. Like any stimulant, it runs out over time...
Alex
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