The USD Index has faltered intraday, as fears of early tapering by the Fed appear to have eased for now. The latest jobs reports (NFP and Jobless Claims) indicate that the US labour market continues to recover. However, an uptick in the unemployment rate also shows that the labour market […]
In this section, you will find important information on the US dollar index: news, actionable trading ideas, and a live DXY chart. All of which will help you understand the markets better.
What is USD?
USD is the financial abbreviation for the United States dollar. As its name suggests, it is the official currency used by the United States of America and its territories since the Coinage Act of 1792. It is governed by the Federal Reserve, otherwise known as the Fed. The Federal Open Market Committee (FOMC) is the board that decides on monetary policy.
Most of the world’s currency reserves are in US dollars. This is why it is also dubbed as the global currency. The Bretton Woods System allowed countries to pegged their currencies to the US dollar. Consequently, central banks all over the world accumulated the currency in their vaults to help stabilize their economies after the Second World War.
It is then no surprise that among all currencies on the spot FX market, the US dollar is the most heavily traded. Its performance is often tracked through the US dollar index, with the most popular being the DXY index. It measures the value of the US dollar against a basket of 6 currencies. Namely, the following make up the basket: the euro makes up a huge percentage of it at 57.6%, followed by Japanese yen at 13.6%, the British pound is in third at 11.9%, the Canadian dollar makes up 9.1%. Meanwhile, the Swedish krona and Swiss franc make up the smallest portion of the basket at 4.2% and 3.6%, respectively.
The DXY was introduced in 1973 when the Bretton Woods System was no longer in effect. The US dollar index also makes it easier for forex traders to see the general performance of the US dollar without needing to check its chart against its counterparts individually. It can also be used as a leading indicator. For instance, the DXY may already be testing a major resistance level. A forex trader can then use the information to look for potential trades to sell the US dollar against the yen or the euro, for example.
The USD Index (DXY) is off intraday highs, as the June edition of the Non-farm Payrolls report showed mixed data. While the US public sector added 850K jobs in a figure that beat the market expectation and consensus of 583K and 725K, respectively, unemployment rose by a point from 5.8% […]
The USD Index is up on the day after June delivered a solid increase in private-sector payrolls. However, hiring seems to have slowed from the previous month, as the ADP data showed. The ADP Employment Change data showed that the US private sector added 692K jobs. This number outstripped the […]
The USD Index is set to net its biggest daily gain in seven as the flight to safety takes hold of the markets on the back of the spread of the Delta variant of the coronavirus. Risk aversion appears to have imposed itself in Tuesday’s trading, as risky commodities took […]
The USD Index (DXY) looks set to end the week lower after the Fed’s key inflation metric registered lower on a monthly basis. The Core PCE Price index fell from 0.7% to 0.5% (consensus 0.6%). The University of Michigan Consumer Sentiment Index also fell from 86.4 to 85.5. The market […]
As expected, the US Dollar Index slipped after the Fed Chair Jerome Powell played down the FOMC’s hawkish statements of last week while testifying before the US House Select Subcommittee on the Coronavirus Crisis via satellite. Powell indicated that the rise in inflation was likely a temporary event and that […]
The USD Index is edging higher once more, ahead of Tuesday’s testimony by Fed Chair Jerome Powell before the US House Select Subcommittee on the Coronavirus Crisis. Following four solid gains on the USD Index as a result of the hawkish stance the Fed assumed after its rate decision on […]
The USD Index is trading lower on a day that has seen light trading as traders prepare for the FOMC decision on Wednesday. The USD Index is trading 0.05% lower after the greenback gave up earlier gains posted. Traders are preparing for probably the most important Fed meeting in 2021 […]
The USD Index may have gained yesterday after the ADP private-sector data showed an addition of nearly a million jobs. Public sector jobs did not return as expected in May, as revealed by the latest NFP data. The addition of only 559K jobs where 645K was expected did not help […]
The USD Index has pushed to new weekly highs around 90.40 after the Core PCE Price Index (monthly) rose from 0.4% to 0.7%, beating the market expectation of 0.6%. This translates to a rise of 3.1% annually in April, topping estimates as well. This data set is the key inflation […]