US Dollar Index (DXY)
ICE's index of the dollar against six major currencies, weighted most heavily toward the euro.
The US Dollar Index, quoted as DXY, measures the value of the dollar against six currencies: the euro, yen, pound, Canadian dollar, Swedish krona and Swiss franc. The euro carries more than half of the weight. It is a geometric weighted average, and a higher value means a stronger dollar. The index was set at 100 in 1973.
On our site, DXY is shown with its daily change and the major pairs that drive it. A DXY move that comes mostly from the euro reflects European conditions as much as US ones.
Traders care because a strong dollar tightens financial conditions for emerging markets and pressures commodity prices quoted in dollars. A weaker dollar tends to support gold and the earnings of multinational companies.
Worked example (illustrative numbers, not real data): DXY rises from 100 to 102, a 2 percent move. The euro carries a weight of about 58 percent, so a 3 percent fall in the euro alone would account for most of that rise.