US Dollar Index (DXY)

Definition

The US Dollar Index (DXY or USDX) measures the value of the United States dollar relative to a basket of six major foreign currencies: the euro (57.6% weight), Japanese yen (13.6%), British pound (11.9%), Canadian dollar (9.1%), Swedish krona (4.2%), and Swiss franc (3.6%). Established in 1973 with a base value of 100, the index rises when the dollar strengthens against these currencies and falls when it weakens. The DXY is widely used by traders, economists, and policymakers as a benchmark for the dollar's global strength. A strong dollar makes US exports more expensive but imports cheaper, while a weak dollar has the opposite effect. The index is heavily influenced by interest rate differentials and economic data.