![]() ![]() Under assault by Soros and other speculators, who believed that the pound was overvalued, the British currency crashed, in turn forcing the United Kingdom’s dramatic exit from the European Exchange Rate Mechanism (ERM), the precursor to the common European currency, the euro. ![]() George Soros had the answer once-in 1992-when he successfully bet $1 billion against the British pound, in what turned out to be the beginning of a new era in large-scale currency speculation. How does one determine whether a currency is fundamentally undervalued or overvalued? This question lies at the core of international economics and many trade disputes. A real bargain (photo: Tim Graham/Corbis) ![]()
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