Re: Which currencies are over-valued?

Lantern wrote:
Brablo wrote:
How do you know whether or not a currency is over-valued or not? >

If you knew the answer to this question, you could be a
muti-billionaire. There are full time currency traders and dealers and
buyers and sellers...a market. Also, there are the hedge funds which
buy and sell currencies as they judge their values.


I think the question to ask is "overvalued by whom and compared to what"? China might think the USD is too high, but EU thinks it's too low. One trader might think the USD is overvalued while another doesn't. That's why they bet, but there is no equilibrium to be reached unless you.

Failing that you can always refer to the Big Mac Index:

http://www.economist.com/markets/Bigmac/Index.cfm
.