US dollar index (DXY)

The US Dollar Index, published by ICE and widely known by its ticker DXY, tracks the value of the dollar against a basket of six currencies. It was set at 100 in March 1973, shortly after the move to floating exchange rates. A reading of 105 means the dollar is about 5% stronger against the basket than at that starting point.

The basket weights have been unchanged since the euro replaced its predecessor currencies in 1999:

• Euro: 57.6%
• Japanese yen: 13.6%
• British pound: 11.9%
• Canadian dollar: 9.1%
• Swedish krona: 4.2%
• Swiss franc: 3.6%

Example

Because the euro makes up more than half the index, DXY and EUR/USD usually move in opposite directions. Illustrative case: if EUR/USD rises 1% and the other five currencies are unchanged against the dollar, DXY falls by roughly 0.6%. If the yen also strengthens 1% against the dollar on the same day, the index falls a little further, by roughly 0.7% in total.

Practical notes

• It is not a trade-weighted index. The basket leaves out China, Mexico and other large US trading partners, so it reflects the dollar against other developed-market currencies. The Federal Reserve publishes broader trade-weighted dollar indices for that purpose.
• Context, not a signal. Traders watch DXY to tell whether a move in a single pair is about the dollar broadly or about the other currency. If USD/JPY rises while DXY is flat, the move is more likely about the yen.
• Gold and commodities are priced in dollars, so a stronger dollar is one of many influences on them, though the relationship is not stable.

Our guides to currency correlation and what moves currency prices explain how traders use it.