DXY U S. Dollar Index Chart

These include, among others, inflation and deflation in the US dollar and foreign currencies included in the comparable basket, as well as economic growth and recessions in the respective countries. The Federal Reserve created an official index (DXY) in 1973 to keep track of the dollar’s value. The dollar changes constantly in reaction to shifts in the ongoing forex trades.

As I mentioned, these six currencies currently make up the DXY, but that may be subject to revision in the future. Both the Swedish Krona and the Swiss Franc are smaller global trading partners than China, Mexico, South Korea, and Brazil. This means that we may eventually see the one or more of these nation’s currencies replacing the how to buy tokens Krona, and or the Franc at some point in the future. Another possibility is that one or more of these nation’s currencies may someday be added to the DXY basket, without replacing the Krona or Franc. The DXY measures the strength of the US dollar against six other major currencies, such as the EUR, SEK, CHF, JPY, GBP, and CAD.

A surging U.S. dollar just sent gold to a 6½-month low below $1,900 an ounce

The U.S. Dollar is holding its ground against a basket of major currencies on Monday, near a 10-month high, as expectations of U.S. interest rates remaining elevated continue to bolster its position. The DXY Index is often used by traders to monitor the value of the USD in comparison to a basket of select currencies in a single transaction. In theory, the direction of the moving average (higher, lower or flat) indicates the trend of the market.

  • Federal Reserve in 1973 after the dissolution of the Bretton Woods Agreement.
  • These include, among others, inflation and deflation in the US dollar and foreign currencies included in the comparable basket, as well as economic growth and recessions in the respective countries.
  • In the coming years, it is likely currencies will be replaced as the index strives to represent major U.S. trading partners.
  • A DXY graph shows that the index fell steadily until it bottomed out in 2008, when the global financial crisis prompted a flight to safe-haven financial assets like the global reserve currency.
  • The ICE U.S. Dollar Index futures contract is the only publicly available, regulated market for U.S.
  • Last year, similar circumstances led to policy action to support the yen.

The prices of the DX futures contracts are set by the market, and reflect interest rate differentials between the respective currencies and the U.S. dollar. The U.S. dollar index is a measurement of the dollar’s value relative to six foreign currencies as measured by their exchange rates. Over half the index’s value is represented by the dollar’s value measured against the euro. The other five currencies include the Japanese yen, the British pound, the Canadian dollar, the Swedish krona, and the Swiss franc. Dollar Index trading is a great way for investors to gain exposure to the US dollar and take a position on the US economy and/or the global market.

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The value of the DXY Index is calculated in real-time approximately every 15 seconds based on spot prices of the constituent currencies. The calculation takes the midpoint prices between the bid and offer for each currency. The prices for the DXY futures contracts are set by the market and reflect differentials in interest rates between the US dollar and the component currencies.

An overvaluation of the USD led to concerns over the exchange rates and their link to the way in which gold was priced. President Richard Nixon decided to temporarily suspend the gold standard, at which point other countries were able to choose any exchange agreement other than the price of gold. In 1973, many foreign governments chose to let their currency rates float, putting an end to the agreement. The index started in 1973 with a base of 100, and values since then are relative to this base. It was established shortly after the Bretton Woods Agreement was dissolved. As part of the agreement, participating countries settled their balances in U.S. dollars (which was used as the reserve currency), while the USD was fully convertible to gold at a rate of $35/ounce.

Buying 100 shares of UUP means the trader expects the dollar to outperform the six constituent currencies. When the index is increasing, the other six currencies are losing ground. This can be due to changing inflation figures, trade, as well as a multitude of political factors. The dollar index is often used as the benchmark performance indicator for the US economy, alongside the S&P 500.

Monday’s U.S. economic news was mostly better than expected and bullish for the dollar. The Sep ISM manufacturing index rose +1.4 to 49.0, stronger than expectations of 47.9. Also, Aug construction spending rose +0.5% m/m, right on expectations.

Key data points

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DAX Index, FTSE 100, STOXX 600: Euro Zone, UK PMI Weakness Dampens Early Optimism

Follow the rate of the US Dollar Index (DXY) in real-time at Capital.com to spot the best trading opportunities. While some like to say they were surprised by what the US Fed did and said, the reality is there has been plenty of time to plan fibonacci extension levels ahead based on previous comments. Gold made an ominous bearish technical pattern when it made a double-top, reaching $2,072 per ounce in March 2022 and May 2023. Since the latest peak, the price action turned bearish, with the precious…

The DXY originated in March of 1973, shortly after the dismantling of the Bretton Woods system; a unified fixed rate system between the Allied Nations, shortly after the second world war. At this point the DXY hit its all-time high of 164.72, as a result of the first ever DXY futures trading. The DXY would eventually hit it’s all time low of 70.57, in March of 2008. Invesco’s bullish and bearish ETFs – UUP and UDN are two of such funds tradable on the stock market. The equity funds tracking the dollar index are ETFs, which means they can be traded on the stock exchange just like any other stock.

It was a wild week, to say the least, while the three main grain markets reminded us of lessons learned over the years. Silver futures have looked like they will explode higher on rallies, but corrections make them appear to fall into a bearish abyss. Over the past six months, selling silver when it looks the best and buying… The ICE U.S. Dollar Index is calculated in real-time approximately every 15 seconds. This real-time calculation is redistributed to all data vendors. As a currency trader, you should be familiar with ALL three of them.

FAQs on the DXY

GBP drops after a softer CPI reading scares investors about the BoE intentions. JPY on the lookout for further policy tweaks from Governor Ueda. Highlights important summary options statistics to provide a forward looking indication of investors’ sentiment. The US Federal Reserve broke its string of 10 consecutive interest rate hikes Wednesday. But it was what was said in the announcement that seemed to have makes attention through the close.