What is the Dollar Index?

The dollar index tracks the relative value of the U.S. dollar against a basket of important world currencies. If the index is rising, it means that the dollar is strengthening against the basket - and vice-versa. What Currencies Are in the USDX Basket? The USDX tracks the dollar's ( USD) relative strength against a basket of foreign currencies.

What is the DXY index?

DXY was originally developed by the U.S. Federal Reserve in 1973 to provide an external bilateral trade-weighted average value of the U.S. dollar against global currencies. U.S. Dollar Index goes up when the U.S. dollar gains "strength" (value), compared to other currencies. The following six currencies are used to calculate the index:

What is the value of the USDX?

The initial value of the USDX was 100, but has fluctuated as high as 163.83 in March 1985 and as low as 71.58 in April 2008. How Is the U.S. Dollar Index Used? The USDX allows traders and investors to monitor the purchasing power of the U.S. dollar relative to the six currencies included in the index’s basket.

What is the currency exchange rate index?

The index is currently calculated by factoring in the exchange rates of six foreign currencies, which include the euro (EUR), Japanese yen (JPY), Canadian dollar (CAD), British pound (GBP), Swedish krona (SEK), and Swiss franc (CHF). The euro is, by far, the largest component of the index, making up 57.6% of the basket.