BF2S Forums Perhaps someone can explain this to me (currency trading)

Yea, i wish i bought some dollors a few months back when it was $2.05 to the £1, now its $1.8 and falling!!!

Also add the US exports have increased a lot due to the us dollar being worth nothing compared to the euro.

I don't think the US Dollar is undervalued (generally - against other currencies).  I think the Euro and Pound Sterling are overvalued and have been since at least last year.  However, I think in the near future the Euro and the US Dollar will be mere percentages off, as opposed to 3:2 or even 2:1 values.

Pound and Euro are dropping to more realistic levels - they were overvalued.  The inclusion of some Eastern European countries into the EU surely had something to do with that (the drop).

KEN-JENNINGS wrote:

I don't think the US Dollar is undervalued (generally - against other currencies).  I think the Euro and Pound Sterling are overvalued and have been since at least last year.  However, I think in the near future the Euro and the US Dollar will be mere percentages off, as opposed to 3:2 or even 2:1 values.

On a day to day basis, the dollar seemed appropriately valued, but from a long-term perspective, it was definitely undervalued against especially European currencies. Things aren't going much better in the US at the moment, but the results of European exposure to some of the same forces that are driving the American markets down are just now hitting European economies, and this really does not come as a surprise at all. I was expecting Europe to feel the squeeze a lot sooner, though, but I guess worsening American consumer confidence exacerbated the US downturn more immediately than European confidence did.