Yeah, the dollar really is hitting record lows, sort of

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I always get a little irked when I read an article stating that the dollar has hit a “record low” against the euro. The euro’s been around for less than a decade, and happened to come into existence at a time when the dollar was extremely strong. Record lows against it are meaningless.

Of far more interest is the value of the dollar against the currencies of our main trading partners. So I checked out the Federal Reserve’s trade-weighted index of the dollar vs. the other major, freely traded currencies, which goes back to 1973, and found that, indeed, the dollar is the lowest it’s been since the creation of that measure. Things are different when you look at the “broad” trade-weighted index, which just goes back to 1995 and mixes the major currencies with the likes of the Chinese remninbi, the Mexican peso, and the Indian rupee. The dollar’s still well above its mid-1990s lows there. All of which means … I dunno. I just think it’s a nice excuse for yet another chart: