“The dollar fell nearly 1% against a broad basket of currencies this week, following a drop of similar size last week. The ICE U.S. Dollar Index closed at its lowest level since August 2008, before the financial crisis intensified. "The dollar just hasn't had anything positive going for it," said Alessio de Longis, who oversees the Oppenheimer Currency Opportunities Fund. The main driver for the dollar's decline is low interest rates in the U.S. compared with higher and rising rates abroad. Lower rates mean a lower return on cash—and the pressure from that factor could intensify next week when the Federal Reserve's rate-setting committee is expected to signal that U.S. short-term rates will likely remain near zero for many months to come.”

Question: Using the money market and interest parity equilibrium explain how a relative increase of foreign interest rate leads to dollar’s depreciation.