For a recent article, EuroMoney Magazine pulled together some of the top currency analysts on Wall Street for a comprehensive discussion on the state of forex.  The conversation zigs and zags, covering such varied topics as volatility, interest rates, trading strategies, emerging markets, central banks and market infrastructure.  Among other things, it was noted that volatility has surged by 50% since the inception of the credit crunch, returning to levels last seen at the beginning of the decade.  One of the participants broached the possibility of deflation, but that was quickly dismissed by the others due to surging food and energy prices. It was also noted how Central Banks are caught between fighting inflation and facilitating growth, in deciding whether to raise or lower rates, respectively. The main theme in the markets is the sagging Dollar, which is being punished for both economic and strategic reasons as investors sell it in response to the economic downturn and to fund carry trades. Finally, one participant commented that despite growth in liquidity, forex strategy hasn’t evolved much, and the markets remain vulnerable to a huge sell-off due to the "mob mentality."

Read the Discussion in its Entirety