The dollar will continue to fall. America is deliberately doing this to make others pay the bill for their irrational lending, greed and overspending. Hardly surprising it has lost world respect. Its leadership is corrupt and morally bankrupt. Their mantra of democracy is wearing a bit thin as they hardly walk the walk.
UAE will continue the peg. Who cares about inflation - it keeps their property bubble growing and lowers ex-pat employment costs. Also keeps them in the good books with Mr. Bush. If they dumped the dollar peg, he would go down as the second president in power when the american currency collapsed entirely.
Inflation will be officially 20% by the end of 2008. The dollar will not recover for a few years yet. America has not completed its cycle of systematic devaluation.