Short answer: the dollar is not strong right now, at least not in the way the phrase usually implies. Over the past 12 months the US dollar is down about 0.7% against a basket of 15 other major currencies, which puts it at rank 8 of 16 - the exact middle of the table.
That's a very different picture from "the dollar is strong," and the gap between the two is mostly a measurement problem.
Why the dollar can look strong and be mid-table at the same time
Most "strong dollar" coverage is really about one pair, usually EUR/USD, or about the DXY index - which is 57.6% euro by weight and contains just six currencies, four of them European. Against the euro the dollar genuinely is ahead: EUR is down 2.3% against USD over 12 months. But the euro itself is a weak performer this year, sitting at rank 10 of 16. Beating a laggard isn't strength.
Widen the frame to all 16 currencies and the dollar's position changes. It's behind the Hungarian forint (+9.3%), the Australian dollar (+8.3%), and several others. It's ahead of the euro, the pound and - by a wide margin - the Japanese yen, which is last of 16 at -7.5%.
So both statements are true at once: the dollar is stronger than the euro, and the dollar is an average performer. Which one you hear depends entirely on which benchmark someone picked.
The one-month picture is turning against the dollar
Over the last month the yen gained 3.1% against the dollar - a sharp reversal for a pair that had moved one way for most of the past three years.
That reversal is the carry trade unwinding at the margin. For years the dollar was on the receiving end of money borrowed cheaply in yen; as the Bank of Japan keeps nudging its policy rate up, that trade gets less attractive and some of it comes back. The dollar doesn't have to weaken on its own for this to show up in the index - it just has to stand still while the funding currencies recover.
"Strong" for whom - three different questions
People searching for how strong the dollar is usually want one of three different answers:
- Will my trip abroad be cheaper? Then you want the dollar against the specific currency you'll be spending. USD vs EUR for Europe, USD vs JPY for Japan - and those two currently point in opposite directions.
- Are my dollar savings holding value? Then nominal strength is the wrong measure entirely. Adjusted for US consumer-price inflation, the dollar's real 12-month change is what matters, and the real strength mode on the dashboard shows it separately for every currency in the basket.
- Is the dollar strong by historical standards? Over three years the dollar's index change is slightly negative - it has given back ground, not gained it. The 2022-era "strongest dollar in 20 years" framing hasn't been current for a while.
What would actually make the dollar strong again
A genuine dollar uptrend in the index needs the rate gap to move back in its favour: the Federal Reserve holding while other central banks cut, rather than the current direction of travel where the ECB and Bank of Japan have both been tightening into a gap the Fed opened years ago. A risk-off shock would do it too - the dollar still absorbs safe-haven flows faster than anything else in the basket. Neither is in play as of August 2026.
Check it yourself
The dollar's index updates every trading day. The USD strength page carries the current 1-month, 12-month, 3-year and inflation-adjusted figures with the live chart, and the worldwide dashboard shows where it sits against all 16.
Compare the dollar directly: EUR vs USD, GBP vs USD, USD vs JPY, or CAD vs USD.
This article is informational, not investment advice.