Different Scenarios

                   Based on US Fed's rate increase decision and USD's reaction against major currencies following could happen:

Scenario 1:

                   In scenario 1 FED may not increase the rate till March,2016 and due to that USD may either loose or may not gain much against major currencies.This scenario is good for US Economy.Exports will do well.Imports may not be a major threat to domestic manufacturers in US. Whereas it is not good for economies which are depending on Exports, due to their currency either does not loose much against USD or gain strength against USD.In these economies if corresponding local manufacturers are not competitive the imports will start swallowing their domestic market share. For economies which depend on imports they will get benefited because of dis-inflationary conditions.

 Scenario 2:

                    In scenario 2 FED may not increase the rate till March,2016 because of poor visibility of global economic growth and due to that USD may   gain strength against major currencies.This could happen if Investments are made in USD as safety heaven.This will be bad for US exporters as well as Domestic producers in US. Exporters in US will loose their competitiveness and domestic producers may not be able to compete with imports in US. In this scenario currency war will make countries to compete for a dull global demand. Importing countries might start importing inflation. Countries having high debt level in USD will find it difficult to service because of strained cash flows.

 Scenario 3:

                    In scenario 3 FED may  increase the rate during 2015 and due to that USD may   gain strength against major currencies.Under this scenario also as conveyed earlier, it will be bad for US exporters as well as Domestic producers in US. Exporters will loose their competitiveness and domestic producers may not be able to compete with imports. Most of the currencies might loose against USD and all the exporting economies will try to take their share of global demand. Out of desperation some countries might even devalue their currencies to stay in global export market. A strong dis inflationary situation will prevail. Economies which are facing the challenge of increasing inflation will find it very difficult to do that.

                     If China  either starts reducing its oil accumulation or stops accumulating, oil might come down to USD 20/ bbl or USD 25 /bbl.This might pull down the economies of major oil producing countries including US.

                    The turmoil prevailing globally as of now is tricky and all central banks and governments should work in tandem to avert a potential global depression which might start in the middle of 2016 if not attended with great care.