The published inflation rate does not matter. What matters, what moves the dollar verses other currencies is the REAL inflation rate. Currencies will always seek their own level in the world marketplace. When the dollar buys less in overseas markets, that means it is inflating faster than other currencies, therefore it will fall. If the dollar buys more it means the dollar is stronger, or rising if you will. Published reports count for nothing, real buying power, currency verses currency, determines the level of all currencies.