It was this period that convinced a lot of people that some new factor must be at work, which was overwhelming the normal determinants of the exchange rate. It was also in this period that the alternative explanations were put forward most volubly.
The influences Before getting on to some of the newer explanations for the currency’s movements, it is worth looking at some more conventional explanations. The first of these is the strength of the US dollar itself, which has been the biggest reason behind our recent experience.