U.S. Dollar Index

The U.S. Dollar Index (USDX, DXY, DX) is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies,[1] often referred to as a basket of U.S. trade partners' currencies.[2] The Index goes up when the U.S. dollar gains "strength" (value) when compared to other currencies.[3]

US Dollar Index and major financial events.

The index is designed, maintained, and published by ICE (Intercontinental Exchange, Inc.), with the name "U.S. Dollar Index" a registered trademark.[4][5]

It is a weighted geometric mean of the dollar's value relative to following select currencies:

• Euro (EUR), 57.6% weight
• Japanese yen (JPY) 13.6% weight
• Pound sterling (GBP), 11.9% weight
• Canadian dollar (CAD), 9.1% weight
• Swedish krona (SEK), 4.2% weight
• Swiss franc (CHF) 3.6% weight

History

USDX started in March 1973, soon after the dismantling of the Bretton Woods system. At its start, the value of the U.S. Dollar Index was 100.000. It has since traded as high as 164.7200 in February 1985, and as low as 70.698 on March 16, 2008.

The make up of the "basket" has been altered only once, when several European currencies were subsumed by the euro at the start of 1999. Some commentators have said that the make up of the "basket" is overdue for revision as China, Mexico, South Korea and Brazil are major trading partners presently which are not part of the index whereas Sweden and Switzerland are continuing as part of the index.

Year (last business day)	DXY Close	Factors Driving Dollar's Value[6]
1967	121.79	Gold standard kept dollar at $35/oz.
1968	121.96
1969	121.74	Dollar hit 123.82 on 9/30.
1970	120.64	Recession.
1971	111.21	Wage-price controls.
1972	110.14	Stagflation.
1973	102.39	Gold standard ended. Index created in March.
1974	97.29	Watergate.
1975	103.51	Recession ended.
1976	104.56	Fed lowered rate.
1977	96.44
1978	86.50	Fed raised rate to 20 percent to stop inflation.
1979	85.82
1980	90.39	Recession.
1981	104.69	Reagan tax cut.
1982	117.91	Recession ended.
1983	131.79	Tax hike. Increased defense.
1984	151.47
1985	123.55	Record of 163.83 on March 5.
1986	104.24	Tax cut.
1987	85.66	Black Monday.
1988	92.29	Fed raised rates.
1989	93.93	S&L Crisis.
1990	83.89	Recession.
1991	84.69	Recession.
1992	93.87	NAFTA approved.
1993	97.63	Balanced Budget Act.
1994	88.69
1995	84.83	Fed raised rate.
1996	87.86	Welfare reform.
1997	99.57	LTCM crisis.
1998	93.95	Glass-Steagall repealed.
1999	101.42	Y2K scare.
2000	109.13	Tech bubble burst.
2001	117.21	Dollar rose to 118.54 on 12/24 after 9/11 attacks.
2002	102.26	Euro launched as a hard currency at $.90.
2003	87.38	Iraq War. JGTRRA.
2004	81.00
2005	90.96	War on Terror doubled debt. It weakened the dollar.
2006	83.43
2007	76.70	Euro rose to $1.47.
2008	82.15	Record low of 71.30 on 3/17.
2009	77.92	ECB lowered rates.
2010	78.96	QE2.
2011	80.21	Operation Twist. Debt crisis.
2012 - 2013	79.77	QE3 and QE4. Fiscal cliff.
2013	80.04	Taper tantrum. Government shutdown. Debt crisis.
2014	90.28	Ukraine crisis. Greek debt crisis.
2015	98.69	Fed raised rates.
2016	102.21
2017	92.12	EU strengthened.
2018	96.17	Dow falls.
2020	93.27	COVID-19 outbreak. Massive quarantines slowdown the global economy.

Quotes

ICE provides live feeds for Dow Futures that appear on Bloomberg.com, CNN Money, DollarIndex.org. USDX is updated whenever U.S. Dollar markets are open, which is from Sunday evening New York City local time (early Monday morning Asia time) for 24 hours a day to late Friday afternoon New York City local time.

Calculation

The U.S. Dollar Index is calculated with this formula: USDX = 50.14348112 × EURUSD^-0.576 × USDJPY^0.136 × GBPUSD^-0.119 × USDCAD^0.091 × USDSEK^0.042 × USDCHF^0.036 [7]

Trading

The Index can be traded as a futures contract on the ICE exchange. It is also available indirectly in exchange-traded funds (ETFs), options, CFDs and mutual funds.

See also

• Trade Weighted US dollar Index
• Special drawing rights
• Dow Jones FXCM Dollar Index
• Wall Street Journal Dollar Index[8]

References

1. "U.S. Dollar Index - USDX". Investopedia. Retrieved March 23, 2013.
2. "US Dollar Index Hits 12-Year High As ECB Unveils €1 Trillion Stimulus". FXTimes. Retrieved March 23, 2015.
3. "US Dollar Index". FXStreet. Retrieved March 23, 2013.
4. "U.S. Dollar Futures". Retrieved July 22, 2017. The U.S. Dollar Index, together with all rights, title and interest in and related to the U.S. Dollar Index, including all content included therein (including, without limitation, it’s formulation, components, values, weightings and methods of calculation), and all related intellectual property and property rights, is the exclusive property of ICE Futures U.S., Inc.
5. United States Patent and Trademark Office. "Trademark Search, Serial Number 74350026". Retrieved July 22, 2017.
6. US Dollar Index®, What It Is, and Its History
7. "U.S. Dollar Index® Contracts" (PDF). 2018. p. 2. Retrieved October 15, 2018.
8. "Wall Street Journal Dollar Index". Dow Jones & Co. Retrieved July 24, 2013.

External links

• USDX Quotes