We’ve eased back to the 1.3922 level after stalling at 1.3949. 1.3922 is the 200 week moving average. 200 weeks…that’s 3.8 years. So we sit at our average level for basically the past fours years…hard to say that either the dollar or euro are dramatically over or under-valued.
We live in interesting times in which the euro rallies despite still lingering sovereign debt and banking problems in Europe and not long after the dollar surged to 1.2300 in fall 2008 despite the near-collapse of the US banking system….
Central bankers look at those sorts of average when deciding whether action is needed in a particular currency pair. Clearly there is no basis for action by either the US or the Eurozone…