What Is The Dollar Index?
The (US) Dollar Index (USDX/DXY) is an index that measures and reflects the strength or the weakness of the US Dollar against a “basket” of 6 other major currencies.
Here’s the basket and it’s weighting:
- Euro 57.6%
- Japanese Yen 13.6%
- GBP 11.9%
- Canadian Dollar 9.1%
- Swedish Krona 4.2%
- Swiss Franc 3.6%
Born in March 1973 the Dollar Index was set at 100. It seen a High of around 150 in February 1985 and a Low of around 70 in March 2008.
When the Dollar Index RISES it indicates US Dollar STRENGTH and when it FALLS, US Dollar WEAKNESS.
The Dollar Index is traded like any other instrument assuming your broker supports it – Look for the symbol USDX or DXY.