What is the US dollar index?

founded in 1973 by a federal reserve bank in the United States is the US dollar index of a comparison of six global currencies against the US dollar. Six currencies included in the index are Euro, British pound Sterling, Japanese Jena, Swedish Krona, Swiss Frank and Canadian dollar. The performance of each of these currencies is compared with the US dollar index, which is updated several times on the day. This may be best described as a comparative performance at the US dollar. While USDX is carefully monitored by financial experts, foreign exchange analysts, governments and currency traders, it follows most at the time of financial stress as an indicator of how healthy or weak is the global economy. The index is also on a constant calculation cycle of 24 hours a day every day.

Genesis Index of the US dollar can be traced to dismantle the agreement on Bretton Woods, which occurred in the early 70 years. This agreement that previously pIt contradicts the solid exchange, found impractical because it was not possible for the US dollar to be repaired, and at the same time allow the existence of a free capital system. The US dollar was also negatively influenced by the Vietnam War and the lack of the currency of this country. The result of this disassembly was the US dollar index, according to which the future business value of a foreign currency would be determined by its comparison with the US currency.

Although the US dollar index includes only a comparison of six global currencies, these six currencies actually represent 21 countries. This is because 16 countries use the euro as a standard currency. Because the euro represents so much different country, it is also considered to be the largest currency in the dollar index.

While the US dollar index consists of only six currencies representing 21 different countries, other countries also pay very much attention to the index. For the same reasons why traders of currencies and others follow the index for telling symptoms of health of the global economy, others fromme that use other currencies the same. When the US dollar rises or falls, it is a good hint of how well or how bad other currencies are doing, whether they are part of the index or not.