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It's because everyone in the fucking world expects the US to bail them out. Then the US has to borrow to fund our debt. If the US didn't have to pay for shit that aren't ours we wouldn't have this problem.
The Feds are not raising the short term rate on Sep 20 which signals fear of weaken economy due to Katrina. Thus making our currency weaker on the currency market. Currency worth doesn't necessarily mean the US is weak. The British pound is worth twice as much as the dollar. That's because Britain doesn't have to pay for shit! Yet their economy isn't much largers than California's.
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