Introduction to USD Index
US Dollar Index / USDXUS Dollar Index & reg is an indicator that comprehensively reflects the exchange rate of the US dollar in the international foreign exchange market. It is used to measure the degree of change in the exchange rate of the US dollar against a basket of currencies. It calculates the comprehensive rate of change of the US dollar and the selected basket of currencies , To measure the strength of the US dollar, thereby indirectly reflecting the changes in the US’s export competitiveness and import costs.
Calculation and formula of the dollar index
The dollar index is calculated 24 hours a day, 7 days a week.
USDX dollar index calculation and formula
(Note: The index in the above formula is the weight of the currency, specifically: EUR0.576, JPY0.136, GBP0.119, CAD0.091, SEK0.042, CHF0.036, and SEK is Swedish Krona, Sweden joined in 1995 European Union, but not Euro countries)
What is the impact of the rise and fall of the dollar index
The US dollar is the legal tender of the United States and the currency with the largest circulation in the world. It is widely used as a reserve currency to balance the balance of payments.
USDX is an indicator that comprehensively reflects the exchange rate of the U.S. dollar in the international foreign exchange market, and is used to measure the degree of change in the exchange rate of the U.S. dollar against a basket of currencies. It measures the strength of the U.S. dollar by calculating the combined rate of change of the U.S. dollar and a selected basket of currencies, thereby indirectly reflecting the U.S. export competitiveness and changes in import costs.
The rise in the US dollar index indicates that the US dollar has risen against other currencies. The appreciation of the U.S. dollar can increase the purchasing power of holders and make it cheaper to purchase U.S. dollar-denominated goods. The appreciation of the U.S. dollar has different levels of impact on various industries. While benefiting the import industry, it will also have an impact on the export industry. If the US dollar index falls, the situation is reversed.
The calculation principle of USDX futures is based on the trade settlement volume between major countries in the world and the United States, calculates the overall strength of the US dollar in a weighted manner, and uses 100 points as the dividing line. After the launch of the euro on January 1, 1999, the subject matter of this futures contract was adjusted, from 10 countries to 6 countries, the euro has also become the most important and the most weighted currency, and its weight has reached 57.6%, therefore, the volatility of the euro has the greatest impact on the strength of USDX.