The determination of whether a currency is overvalued or undervalued is usually based on a comparison with

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The U.S. dollar is the world's reserve currency, and as such, it is often used as a benchmark for other currencies. If a currency is overvalued relative to the U.S. dollar, it means that it is worth more than it should be, and if it is undervalued, it means that it is worth less than it should be.

The Determination of Whether a Currency Is Overvalued or Undervalued