What is US dollar index (DXY)?

ICEUS:DX1!   U.S. Dollar Index Futures
Dollar Index History

DXY began in March 1973, shortly after the Bretton Woods system collapsed. Initially, the value of the US Dollar Index was set at 100,000. Since then, the index has peaked at 164.7200 in February 1985 and hit a low of 70,698 on March 16, 2008, and is currently trading at 103.715.
The arrangement of the "basket" took place only once, at the beginning of 1999, when the euro included several currencies. The arrangement of the "basket" does not yet include countries with high trade volumes, such as China, Mexico, South Korea and Brazil. On the other hand, although Sweden and Switzerland do not have large trade volumes, they continue to be included in the index.

What is the Dollar Index?

The US Dollar Index (USDX, DXY) is an indicator of the value of the US Dollar against foreign currencies. It is also referred to as a money basket by US trading partners. The index is designed, maintained, and published by ICE Futures and. It is also registered with the name "U.S Dollar Index".

How Is The Dollar Index Calculated?

The dollar index is calculated by the weighted geometric average of the Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona and Swiss Franc.

✅Euro (EUR)= 57.6% by weight
✅Japanese Yen (JPY) = 13.6 weight
✅British Pound (GBP) = 11.9% by weight
✅Canadian Dollar (CAD) = 9.1% by weight
✅Swedish Krona (SEK) = 4.2% by weight
✅Swiss Franc (CHF) = 3.6% by weight

Its formula is:

DXY = 50.14348112 × EURUSD -0.576 × USDJPY 0.136 × GBPUSD -0.119 × USDCAD 0.091 × USDSEK 0.042 × USDCHF 0.036

Why Dollar Index Increases?

👉🏻Every move that will strengthen the dollar in the United States, decrease in unemployment, positive employment data, high growth figures
👉🏻The depreciation of the local currencies of the six main countries included in the DXY

Why Is The Dollar Index Declining?

👉🏻Data that will cause the dollar to depreciate in the United States, growth figures below expectations, unemployment rates higher than expected
👉🏻Strengthening of the economies of the six main countries in DXY, appreciation of their local currencies

DXY is updated as long as the USD market is open. DXY can be traded as a futures contract on the ICE exchange. It is also available in exchange-traded funds (ETFs), options, and mutual funds.

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