Which is why it's compared to a basket of currencies instead of a single one.
The USD, Yuan, Yen, Euro, GBP, and Rupee cover like 70% of the world's GDP. Maybe throw in the CHF because it's stable.
The dollar index can strengthen while cost of bread doubles in USD terms.
If every government agreed to print 2x the money supply overnight, dollar index remains the same but cost of everything will double (at equilibrium)
Which is why it's compared to a basket of currencies instead of a single one.
The USD, Yuan, Yen, Euro, GBP, and Rupee cover like 70% of the world's GDP. Maybe throw in the CHF because it's stable.