Fiat currencies are like particles floating up and down in a septic tank. At times one currency floats higher than another. Comparing currencies against one another is a relative and not an absolute game. You really don't know whether one has strengthened or the other has weakened. 

The reality is that regardless of which particle has floated higher or lower, everyone knows what is in a septic tank. That is the proper way to look at fiat currencies (and also handle them). 

Here is a classic example of septic tank economics:

"By all rights, the dollar should be declining in value, but it's not," says Eswar Prasad, economics professor at Cornell University. "For the dollar to decline in value, you must have currencies on the other side that will" rise.

Bad as things are in the United States, they look worse in Europe and Japan, making the yen, the euro and the British pound riskier bets in 2011. A notable exception is the Chinese yuan, which is likely to rise next year as Beijing fights inflation.

"The dollar remains the ultimate safe haven," Prasad said.