Fluctuating currency

I first moved to Rio in Oct '94 since my wife is Brazilian and we wanted to spend more time with my newborn son. We arrived there when the "plano real" (currency) was first installed and was one to one with the dollar. As time went by, the real started to fall and by the time the "Asian economic crisis" hit in 1997, the real was 1.8 to the dollar. We left in December and watched from the U.S. as it continued to deteriorate. By the time 2001 rolled around, the real was 3 to 1 with the dollar and then Sept 11 hit.
We decided right then that we were going back to Rio, bad or good, since almost everyone in the world had lost perspective and our priorities had changed from material to emotional. We arrived in Rio in Aug of 2002 and the real was already 3.5 to the dollar. We saw it go down, down, down and hit 3.99 but not 4. The government was buying dollars to prop up the real. The Iraq war started in 2003 and the dollar began it's tumble. The election of Lula (Brazil's president) helped build hope and investors started believing that Brazil was a formidable partner, abeit emerging.
As the dollar declined, the violence in Rio rose, the favelas grew and the tourism business took a hit. The gringo dollars became scarcer and the operators slashed prices to stay in business. I saw people grow more savvy (on both sides - tourist and owners) and saw my commision diminish to half. I could no longer justify trips to the airport to pick up clients, nor free cell phones.
We saw the dollar drop as low as 1.50 and people were complaining that it just wasn't worth it anymore, especially when Mexico or the Bahamas was so close and so cheap. Still, it is hard to match the magic of Rio de Janeiro, or Brazil. Now, as the economic situation in the U.S. grows worse, the dollar for some strange reason has begun to rise again. Economics I do not understand.