The Return of King Dollar?

by: Mark J. Perry

The chart above shows the one-year forward premium or discount for the USD vs. the British Pound [BP] and the Euro, on the first trading of June in 2006, 2007 and 2008 (data available here). Compared to two years ago when the dollar was selling at a forward discount versus both the BP (-0.60%) and the Euro (-2.1%), the dollar is now selling at a forward premiums of +2.6% for the BP, and +1.8% for the euro.

Is this the return of King Dollar?