Currencies · USD
US Dollar Index (DXY)
The US Dollar Index, often called DXY, tracks the value of the US dollar against a basket of six major currencies. It is one of the most widely watched gauges of broad dollar strength.
Updated · FXPIPS Editorial Desk · Educational content, not investment advice
Data
Broad dollar strength
The Federal Reserve's public broad dollar index and ECB reference rates for the six DXY basket currencies.
Drivers
What moves the dollar index
01
US interest rates
Expectations for Federal Reserve policy affect the return on dollar assets. Higher expected US rates relative to other countries tend to support the dollar.
02
Euro area developments
With the euro making up 57.6% of the basket, news that moves EUR/USD has the largest single effect on the index.
03
Global risk sentiment
The dollar is often sought as a safe and liquid currency during periods of stress, although this relationship is not constant.
04
US economic data
Growth, employment and inflation figures shape expectations for the US economy and for Federal Reserve decisions.
05
Relative policy of other central banks
Decisions by the ECB, Bank of Japan, Bank of England and others change interest rate differentials with the US.
What the index measures
The ICE US Dollar Index measures the US dollar against six currencies. A rising index means the dollar has strengthened against the basket overall; a falling index means it has weakened. It was set at a base value of 100 in March 1973, shortly after the move away from fixed exchange rates. A reading above 100 means the dollar is stronger against the basket than at that base; below 100 means it is weaker.
The index is administered by ICE (Intercontinental Exchange), and futures and options on it trade on ICE Futures US.
The basket and weights
| Currency | Weight |
|---|---|
| Euro (EUR) | 57.6% |
| Japanese yen (JPY) | 13.6% |
| British pound (GBP) | 11.9% |
| Canadian dollar (CAD) | 9.1% |
| Swedish krona (SEK) | 4.2% |
| Swiss franc (CHF) | 3.6% |
The basket has been changed only once: in 1999, when the euro replaced the German mark, French franc, Italian lira, Dutch guilder and Belgian franc. The weights have stayed fixed since then.
Because the euro dominates, DXY often moves almost as a mirror image of EUR/USD. It is a measure of the dollar against these six currencies, not against all US trading partners. Currencies such as the Chinese yuan and Mexican peso are not included.
How it is calculated
DXY is a geometrically weighted average of exchange rates:
DXY = 50.14348112 × EUR/USD^(−0.576) × USD/JPY^(0.136) × GBP/USD^(−0.119) × USD/CAD^(0.091) × USD/SEK^(0.042) × USD/CHF^(0.036)
Each exponent is the currency's weight. Pairs where the dollar is the quote currency (EUR/USD and GBP/USD) carry negative exponents, because a rise in those pairs means a weaker dollar. The constant scales the result so the index equals 100 at its March 1973 base.
A simple illustration
Because of the geometric formula, a percentage change in one pair affects the index roughly in proportion to its weight. Illustrative example: if EUR/USD rose 1% and every other rate stayed unchanged, the index would fall by roughly 0.57% (1.01 to the power −0.576 is about 0.9943). A 1% rise in USD/JPY alone would lift the index by only about 0.14%.
How traders use it
- Context for dollar pairs: a broad dollar move shows up in many pairs at once, which helps separate dollar-driven moves from currency-specific ones.
- Correlation awareness: positions in several USD pairs may all be bets on the same index move. See Currency correlation.
- Commodity context: many commodities are priced in dollars, so the index is often watched alongside the Gold Price and Crude Oil.
Trading hours and products
DXY futures trade on ICE nearly around the clock on weekdays. Some brokers offer CFDs on the index, and exchange-traded funds that track the dollar exist in some markets. Contract sizes and the value per point vary, so check the specification before using the Position Size Calculator.
Limitations and risks
- Narrow basket: the index is dominated by European currencies and leaves out many important trading partners.
- Fixed weights that reflect trade patterns from decades ago.
- Leverage in futures and CFDs magnifies gains and losses.
Learn more about what moves the dollar in Interest rates and currencies and Central bank policy. Trading index products carries a substantial risk of loss; this page is for education only.
Read next
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- CommoditiesReading Gold Through the Lens of Real Interest RatesWhy real interest rates are one of the most watched drivers of gold, how to calculate them, and where the relationship can break down. An educational explainer.
- CurrenciesWhy the US Dollar Matters to Every Currency PairThe US dollar sits on one side of most forex trades. Learn why, how it shapes major and cross pairs, and what drives broad dollar strength and weakness.
This page is for education only and is not a recommendation to buy or sell any instrument. Leveraged products such as CFDs and futures can lose you more than you expect; check your broker's contract specifications and your local regulations.