The dollar rallied against the British pound and euro today, reports the BBC, “amid belief that the US economy may be in better health than other countries.”

The pound slumped to 17-month lows of $1.9225, while the euro hit five-month lows of $1.5195. Does this signal a turnaround for the buck?

Steve Sjuggerud in DailyWealth says it’s time to start betting against the euro – which is as expensive as it’s ever been. But Charles Delvalle in Investor’s Daily Edge argues that continued weakness in the US economy means the dollar will have a hard time finding traction for a long-term move.

Steve’s believes the US-eurozone interest-rate trends are likely to reverse in the near future. This is because he sees Europe on its way toward recession.

As The Daily Reckoning’s currency expert Chris Gaffney pointed out yesterday, the eurozone has been posting some pretty poor numbers lately. For instance, yesterday Germany reported 2Q factory orders down for a seventh straight month in June, weighed down by euro strength.

However, Chris says the ECB “has never wavered from their mandate for price stability,” and that this “dogged fight against inflation will help maintain the long-term value of the euro.”

Chris also argues that the dollar rally just doesn’t make sense when you look at the overall global economic picture. Growth in the euorzone is slowing, and Germany may be slipping awfully close to a recession. But Chris says the US is already in a recession. “And while the impotent FOMC sits back and ‘hopes’ that inflation will abate, the ECB has had the courage to continue its fight against inflation.”

Meanwhile, Charles in Investor’s Daily Edge says it’s “highly unlikely” that dollar strength will last long enough to reverse the multi-year long dollar downtrend.

He says: “Since March, the U.S. Dollar Index (NYBOT: DX) has been consolidating between the 70 and 74 cent range. Since mid-July the dollar has mounted a strong rise to the top of this range. But with the continued risk of more foreclosures, multi-billion dollar losses in the financial sector, ballooning deficits and a sluggish economy, the dollar will have a hard time finding traction for a long-term move.”

Nevertheless, the dollar is trending upwards against the euro, prompted for the most part by the European Central Bank’s (ECB) decision yesterday to hold rates steady.

And adding to the euro’s woes were ECB chief Jean-Claude Trichet’s dovish comments following the interest-rate decision.

Adding to the woes were comments from the bank’s chief that economic conditions in eurozone were worsening. And the US economy is showing signs of growth.

If the eurozone slides further toward recession expect the dollar to continue to climb further…