Overvalued US currency means problems ahead

The dollar remains overvalued despite its falls against other world currencies, according to Goldman Sachs.. The group has long regarded the strength of the dollar as unjustifiable and a potential problem for world economies. In mid-June, it revised down its dollar forecast for the next 12 months, expecting a decline of 8% on a trade-weighted basis. Jim O'Neill, a member of the economic research group at Goldman Sachs, says: 'Even a fall of this magnitude would leave the dollar some 6% overvalued so we would not be surprised to see a further decline over the next two to three years...