The US Dollar Still Looks Undervalued

So far in 2014 we have seen the dollar lose ground on a Purchasing Power Parity basis against most major currencies in the world. By our count, the dollar is undervalued against 15 major currencies and overvalued against just 3 (Hong Kong Dollar, Japanese Yen, & Taiwanese Dollar).  The Dollar looks to be the most undervalued against the New Zealand Dollar (32.6%), Australian Dollar (27.4%) and the Czech Koruna (20.8%). The Euro is about 10% overvalued versus the Dollar. Perhaps most interesting is that we are now seeing the British Pound overvalued against the Dollar for the first time since 2008. This relationship flipped at the very end of 2013 and has steadily moved further in favor of the British Pound. Charts below: