Strange currencies

Can someone who understands economics (I can only just about get my head round economics in hindsight) please comment some wisdom about the state of the pound? George Osborne is practically standing at Dover handing out sterling to anyone who wants it, but isn't it fair to say that the pound was massively overpriced until recently? £2 to the dollar, almost £1.50 to the Euro? And don't markets have a tendency to overcorrect after being overoptimistic? Since I can't work out whether Britain genuinely is further up shit creek than the rest of the world when it comes to this recession (the Eurozone officially goes into recession first but the IMF says Britain will be the worst affected), I have no idea if Osborne's doom and gloom is accurate or he's just making political hay while the markets do their natural thing.

Edit: clearly, the exchange rates given above are the wrong way round. Told you I don't understand economics…

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