Nobody seems overly sure what to do or think at the moment. QE2 is on its way in the US (and the UK) yet Mr Geithner does not see this as any sort of devaluation. Nobody really wants to be left holding the USD, yet with the AUD, CHF and JPY at such lofty levels, its difficult to justify buying those. Europe has problems all of its own so its little wonder that uncertainty is the prime factor in the market.
Any prolonged period of uncertainty is likely to end up as risk aversion in my opinion and that would see the USD regain some strength against the EUR and the AUD but probably stay stagnant against the JPY and CHF. Though of course I am talking my book!
