What Is the US Dollar Index?

The US Dollar Index & reg; (USDX) is an indicator that comprehensively reflects the exchange rate of the US dollar in the international foreign exchange market, and is used to measure the degree of change in the exchange rate of the US dollar against a basket of currencies. It measures the strength of the US dollar by calculating the comprehensive rate of change of the US dollar and the selected basket of currencies, thereby indirectly reflecting changes in the US's export competitiveness and import costs.

USD Index

The US Dollar Index & reg; (USDX) is a comprehensive reflection of the US dollar in the international foreign exchange market

Dollar

In 1944, after fierce disputes, the United Kingdom and the United States reached a consensus. In May of that year, the United States invited representatives of 44 governments participating in the establishment of the United Nations to hold a meeting in the United States Bretton Woods and signed the

The U.S. dollar is the legal currency of the United States of America. Because it is the currency with the largest circulation in the world, many countries use the U.S. dollar as a balance of payments.

Euro 57.6 Japanese yen 13.6 British pound 11.9 Canadian dollar 9.1 Swedish kronor 4.2 Swiss franc 3.6

The US dollar index USDX is calculated with reference to the geometric average weighted value of the six currencies' exchange rate changes against the US dollar in March 1973. Measure its value at 100.00. A quote of 105.50 means that its value has increased by 5.50% since March 1973.

March 1973 was chosen as a reference point because it was a historic moment in the foreign exchange market. Since then major trading nations have allowed their currencies to float freely with another country's currency. The agreement was reached at Smithsonian Institution in Washington and symbolizes the victory of free trade theorists. The Smithsonianagreement replaced the unsuccessful fixed exchange rate regime reached in Bretton Woods, New Hampshire, about 25 years ago.

The current USDX level reflects the average value of the US dollar relative to the 1973 benchmark. The US dollar index has risen to 165 points, and it has also fallen below 80 points. This change characteristic is widely compared with futures stock index in quantity and change rate.