The US dollar index
What the DXY measures, how it is weighted and how traders use it.
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Lessons
- 01What is the US dollar index?The US dollar index, often called DXY, measures the dollar against a fixed basket of six currencies: the euro, yen, pound, Canadian dollar, Swedish krona and Swiss franc. It started at 100 in March 1973. The euro carries 57.6% of the weight, so the index often moves like EUR/USD turned upside down.
- 02Using the dollar index in your trading.The US dollar index measures the dollar against a basket of six currencies, so it helps you tell whether a move in a USD pair is broad dollar strength or comes from the other currency. A rising index pushes EUR/USD down and USD/JPY up. It describes the dollar's move at the same moment and does not forecast it.