The US Dollar Index (DXY) is trading 0.23% higher on the day after the dollar held firm on Thursday ahead of the speech by Fed Chair Jerome Powell. Powell takes the stage at an online event hosted by the Wall Street Journal, where he is expected to take questions on […]
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The DXY was introduced in 1973 when the Bretton Woods System was no longer in effect.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) was only able to register marginal gains this Monday after falling yields on the long-term bonds offset any potential for gains from the upbeat ISM Manufacturing PMI report. According to data from the Institute of Supply Management, economic activity in the US manufacturing sector grew in […]
The US Dollar Index (DXY) retains its bullish bias for the day, after the Fed’s preferred inflation barometer, the Core Personal Consumption Expenditures (PCE) Price Index, came in unchanged at 1.5% in January (annualized). This figure was slightly higher than the 1.4% expected by the markets. Furthermore, the drop in […]
The USD Index (DXY) extended its intraday decline after US Pending Home Sales fell sharply in January. Data released by the National Association of Realtors showed that Pending Home Sales dropped 2.8% in January, which was worse than the market consensus of a 0.2% increase. The previous month showed an […]
The US Dollar Index has spiked sharply this Wednesday, as talk of rising inflation has sparked a jump in US bond yields to 1-year highs. The US Dollar is up against a basket of low-yielding currencies, as effectiveness in vaccine rollouts have ramped up expectations of faster economic recovery and […]
The USDZAR continued on its downward trend, as the pair was hit by divergent fundamentals this Wednesday. The US Dollar continues to face significant headwinds, carrying on from Tuesday as stimulus hopes continue to exert downward pressure on the greenback. In contrast, the South African Rand firmed once again after […]
The US dollar index (DXY) is in its sixth straight day of gains ahead of the important US nonfarm payroll numbers. The index is trading at $91.58, which is the highest it has been since December 1. DXY news: The US dollar has been on a strong upward momentum in […]
The US Dollar Index continues to see strength, coming off the back of weakness in the EURUSD, GBPUSD and USDJPY pairs. Weakness in silver on Tuesday is also fuelling demand on the greenback. The performance of the USD Index is surprising. Global stocks, crude oil and other risky assets are […]
The US Dollar was a big winner on the day as it gained broadly across several currency pairs. The USD Index showcases the rise of the greenback against the Swiss Franc, the Euro and Japanese Yen on the day. The index that tracks the performance of the greenback against a basket […]
The DXY has begun the week on a flat note as it continues to hold above 90.0. Most USD-denominated assets are mixed today. With no major fundamentals scheduled until Wednesday’s FOMC decision, USD sentiment remains the determinant of the USD Index’s direction. At this time, the US Dollar Index starts […]