U.S. Dollar Index
The US Dollar Index (USDX, DXY) is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies,[1] often referred to as a basket of US trade partners' currencies.[2]
It is a weighted geometric mean of the dollar's value relative to other select currencies:
- Euro (EUR), 57.6% weight
- Japanese yen (JPY) 13.6% weight
- Pound sterling (GBP), 11.9% weight
- Canadian dollar (CAD), 9.1% weight
- Swedish krona (SEK), 4.2% weight
- Swiss franc (CHF) 3.6% weight
USDX goes up when the US dollar gains "strength" (value) when compared to other currencies.[3]
USDX started in March 1973, soon after the dismantling of the Bretton Woods system. At its start, the value of the US Dollar Index was 100.000. It has since traded as high as 164.7200 in February 1985, and as low as 70.698 on March 16, 2008.
The make up of the "basket" has been altered only once, when several European currencies were subsumed by the euro at the start of 1999. The make up of the "basket" is overdue for revision as China, Mexico, South Korea and Brazil are major trading partners presently which are not part of the index whereas Sweden and Switzerland are continuing as part of the index.
USDX is updated whenever US Dollar markets are open, which is from Sunday evening New York City local time (early Monday morning Asia time) for 24 hours a day to late Friday afternoon New York City local time.
USDX can be traded as a futures contract on the IntercontinentalExchange (ICE). It is also available in exchange-traded funds (ETFs), options and mutual funds.
See also
- Trade Weighted US dollar Index
- Special drawing rights
- Dow Jones FXCM Dollar Index
- Wall Street Journal Dollar Index[4]
