Dollar stable at all cost?

Tomorrow the next important economic indicators will show whether the economy is further growing or on the way back into the trough. The Fed is walking a tight rope right now, if they overshot on their interest goal in order to prevent inflation they actually may burst the real estate bubble, resulting in a rather deflation but strong cooling of the economy. On the other hand, if the fed fails to raise interest rates (NO, they don't set them, but for simplicity lets word it this way!), the economy might overheat and cause inflationary pressure. So either way the US economy may face instability in the near future; however, it remains to be seen which direction we are heading. But lets put it this way, it doesn't look too rosy.
After all we still have gigantic budget deficits hovering over us!