Definition: What is the U.S. Dollar Index?
The Definition: What is the U.S. Dollar Index? The U.S. Dollar I... More is an of the value of the in comparison to selected other currencies.
How is the U.S. Dollar Index calculated?
The U.S. Dollar Index is the weighted geometric mean of the dollar’s value in relation to the following currencies:
- The euro is the official currency of the eurozone, which i... More, 57.6% weight
- The Japanese yen is the official currency of Japan. In t... More 13.6% weight
- The pound is the official currency of the United Kingdom... More, 11.9% weight
- The Canadian dollar is the official currency of Canada and... More, 9.1% weight
- Swedish krona (SEK), 4.2% weight
- The Swiss franc is the official currency of Switzerland... More 3.6% weight
It is likely to be revised in the future as Sweden and Switzerland is a western European country, bordered by Germa... More have become less important in the world economy than The People's Republic of China (中华人民共和国 in si... More or The Federative Republic of Brazil is a country in South Am... More whose currencies are not included in the calculation at the moment.
What does the U.S. Dollar Index mean for traders?
The dollar index goes up when the dollar (USD) becomes stronger in comparison to other currencies.
How to use the U.S. Dollar Index as a confirmation of the trend direction
Since the dollar index reflects the value of a basket of currencies relative to the dollar, it gives a more representative picture of the dollar’s strength or weakness than a single A currency pair is the price of one currency in relation to... More like EUR/USD is a currency pair consisting of the euro and t... More.
Many experienced traders check the U.S. Dollar Index before trading a dollar What is currency? Currencies are the generally accepted medi... More pair and avoid trading against the What is a market trend in trading? A market trend is the ten... More of the dollar index.
How to trade the dollar index
The U.S. Dollar Index can be traded five days per week, from Monday to Friday. It is available as a A future is a contract between two parties to purchase a c... More contract on the Intercontinental Exchange (ICE) as well as through , and at many brokers directly as a