The dollar has undergone some big moves against the euro and yen in recent months, and foreign exchange analysts say there could be more swings in the months ahead given continued uncertainty about Europe's fiscal crisis, changes in Japanese monetary policy and the U.S. federal budget deficit.
"Global geopolitical maneuvering and central bank thinking has certainly allowed volatility to make [foreign exchange] trading very interesting," said Dean Popplewell, director of currency analysis and research at OANDA, a provider of online foreign exchange trading.
The ups and downs in the foreign exchange market have led to talk that central banks are embarking on a global currency war, in which countries try to boost their exports by devaluing their currencies. But analysts said central banks are aiming to revive their sagging economies with their monetary policy moves, not devalue their currencies.
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