Here's part of a great article from the Economist:

Fund managers and bank executives have learnt that investors are often more forgiving if their peers are losing money as well. That lesson applies to economies and their currencies too. The world's financial troubles may have been triggered by America's housing bust, but it is other rich countries that are hurting most. Figures released on August 14th show that the euro-area economy shrank in the second quarter (see article). Japan's GDP also fell in the spring quarter. The Bank of England's governor, Mervyn King, said this week that Britain's economy is likely to stagnate for the foreseeable future (see article).

The mess in America suddenly seems less awful. Indeed, a surge in export sales in June probably means that GDP growth for the most recent quarter will be revised up from 1.9% at an annualised rate, which is already respectable. The foreign-exchange markets have sensed a change in the weather. Over the past week, the dollar has swiftly gained ground against the euro and the pound. The thinking in the foreign exchanges is that it makes less sense to punish the dollar if other economies are doing so badly. The fear of a dollar rout, which has long stalked financial markets and even prompted the Federal Reserve chief, Ben Bernanke, to talk up the currency as recently as June, now seems to have evaporated.