How strong is the dollar?

This chart is arguably the best way to look at the relative strength or weakness of the dollar. It's calculated by the Fed, and adjusted for trade weights and inflation. There are two versions: one using a broad basket of currencies, and the other using just seven major currencies (euro, Can$, yen, pound, swiss franc, aussie$, and swedish krona). The most recent data, released today, shows that the dollar is trading about 2-12% above its long-term average values against these baskets of currencies. I've used a log scale for the y-axis in order to better reflect the degree to which the dollar is above or below its long-term average.