The left chart shows how currencies are currently valued compared to their 10-year average when accounting for changes in inflation, real effective exchange rates. This is one indicator if a currency is under or overvalued on a long-term basis. The right hand chart shows the performance of the U.S. dollar represented by the U.S. dollar index and its relationship to yield differential between the U.S. and the rest of the world. The ability for money to earn a higher level of interest often affects the exchange rate by more money flowing to that market. A larger differential means more currency appreciation. With most major markets now operating with near zero interest rates, this relationship has broken down.