Two thirds of the $USD Index is keyed off the Euro currencies. The $USD Index does not contain any relative currency weighting at all to key trading partners such as Mexico and many Asian counties (Korea, Thailand, Taiwan, Singapore, Hong Kong, etc.). The St. Louis Fed does calculate an alternative trade weighted dollar index that is much more representative of the true U.S. global trade. A declining $ is a “forward inflationary measure.”
Go to the following link and indicate what the chart is indicating about upcoming inflationary pressures? Link is as follows: http://research.stlouisfed.org/fred2/series/TWEXB?&cid=15.
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