Dollar falls across the board as bailout plan's details emerge

Further, Resnick said that since the U.S. Treasury's bailout announcement -- the largest prospective U.S. Government intervention into the private sector since the New Deal era during the Great Depression -- one factor has mitigated the dollar's fall, so far: the flow of capital into the U.S. as part of a flight-to-safety strategy.

"Foreign investors are parking capital in U.S. Treasuries as part of a reduced risk strategy and because global economic growth is slowing. That's boosting the dollar somewhat and lowering our borrowing costs," Resnick said. "But if foreign investors find another safe haven or better risk/return opportunities elsewhere, the dollar will head much lower."

Even without the above, Resnick expects the dollar to re-test $1.50 versus the euro and $1.90 versus the British pound by the end of Q4. What would reverse the above? "A large tax increase at the federal level or massive spending cuts," he said.

Forex / Economic Analysis: The U.S. Treasury Department's effort to make the bailout as broad and as wide as possible does give it more flexibility to deal with the crisis by making more distressed / bad assets eligible for government purchase. But, as trader Resnick indicated, that stance is also fanning fears of large increases in government borrowing -- a decidedly dollar-bearish policy.