Of the 3 majors, USD, EUR, and JPY, at any given time, one is weak, one is strong, and one is somewhere in-between. The stronger or weaker a currency is, the more that the current trend tends to persist.
USD is terrifically weak against EUR right now, and neither Dim Wim and the Bulbs (that's Willem Duisenberg, lame duck head of the Euro Central Bank, and his flunkies) nor Snowboy (our 'esteemed' SecTreas) seem inclined to try to change the situation. ECB just passed on an interest rate cut during the past week.
JPY right now is the currency in the middle. Koizumi and the BoJ/MoF crowd are busily posturing (h*ll, they've been doing that for years) as to whom has the right policy (haha) to end the deflationary spiral in their country. They loathe the idea of JPY getting stronger against USD...but they probably can't stop it.
If you ever played cards with your friends when you were young, you understand the game. It's simply an enormous game of 'Pass The Trash', otherwise known as 'Screw Your Buddy'.
Currencies are nothing more, these days, than a unit of account, each manipulated by its issuing gov't, in an attempt to gain an advantage over the nation's trading partners.
Too cynical for you? Hard lines. That's the way it is.