The U.S. dollar surged to a 17-month high Friday, once again demonstrating its remarkable strength against the carefully selected group of things against which economists have agreed to measure dollar strength.
The dollar climbed as the euro weakened amid French fiscal concerns and broader turmoil in European bond markets, allowing America’s currency to post another impressive victory over currencies currently having an even worse week.
Fortunately, “dollar strength” in foreign-exchange markets refers to how many units of other currencies a dollar buys, and not anything vulgar like how much food, housing, healthcare, education, energy, or other stuff a dollar buys.
That second measurement remains considerably less strong.
According to Bureau of Labor Statistics CPI data, the dollar has lost roughly 49% of its purchasing power since 2000. Go back to 1970 and the loss is about 88%.
This has created one of modern finance’s most useful linguistic achievements: a currency can become steadily less valuable for decades while periodically being declared “strong” whenever neighboring currencies manage to deteriorate faster.
Markets celebrated accordingly.
The dollar is now stronger against the euro, pound and several other major currencies, while remaining mysteriously weak against approximately everything located inside a supermarket.
Analysts emphasized that these concepts should not be confused.
One measures the dollar against other government money.
The other measures it against reality.
Inspired by:
Reuters - "Dollar at 17-month high as global bond rout hits euro" (October 2, 2026)
