Why does the capital account net demand curve for a country's currency have a negative slope?

Answer 1

Well they need a higher interest rate at home so as to urge investment there rather than abroad. No sense in sending all the countries capital out to all the neighbors when it can be of good use right back there at home where it belongs. This operation is tied also to the amount of goods said country is exporting and being paid for as that has some sort of stable influence on the whole works....
Of course if the country used all the money it made to buy up all it's nieghbors....well...anyone check China's assets lately?