What would explain why some coutnries are undervauled and other overvauled in relation to the USD?

Question

What would explain why some coutnries are undervauled and other overvauled in relation to the USD?

Answer 1

Poor country's  currencies are systematically undervalued and there is no good explanation why. see Penn effect

http://en.wikipedia.org/wiki/Penn_effect

Between industrialized countries the differences are less and it depends on trade  and and investment. Right now the dollar is low because we import too much especially oil, and the mortgage crisis has made us a risky place to invest, so we must offer bargains to the rest of the world to get the investment we need to pay for our imports.

Answer 2

There too many reasons to list here.  

But the US dollar is the reserve currency many countries use for buying oil, commodities, and for conducting international trade.  And to have a lot of US dollars in reserve for this kind of trade, a lot of countries buy a lot of US dollars.  Which raises the US dollar price relative to other currencies.

Also a lot of countries deliberately buy a lot of US dollars in order to manipulate the exchange rates and artificially depress the value of their currency relative to the US dollar.  Such currency manipulation gives a pricing advantage to their exporters.