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DXY dollar index explained: what its 6 currencies tell you
DXY is a scoreboard for the US dollar. It doesn't measure the dollar against the whole world, though. It measures it against six currencies, and one of them counts for more than half.
At a glance
| US Dollar Index (DXY) | |
|---|---|
| What it tracks | The US dollar's value against a basket of 6 major currencies |
| How many currencies | 6: euro, Japanese yen, British pound, Canadian dollar, Swedish krona, Swiss franc |
| Weighting | Fixed weights: euro 57.6%, yen 13.6%, pound 11.9%, Canadian dollar 9.1%, krona 4.2%, franc 3.6% |
| Trading hours (ET) | Follows the forex week, roughly Sunday evening to Friday 5 pm ET; futures trade on ICE |
| Related futures / ETFs | US Dollar Index futures on ICE Futures U.S.; US-listed dollar ETFs |
| What moves it most | The Fed, US inflation and jobs data, the ECB, global risk mood |
ICE publishes the index. It started at 100 in March 1973, just after the old fixed-exchange-rate system ended. Above 100 means the dollar is stronger against this basket than it was then; below, weaker.
Why the euro dominates
The weights were fixed long ago and changed only once, when the euro replaced several European currencies in 1999. So DXY is lopsided: the euro alone is 57.6%.
In plain words: DXY is mostly the inverse of EUR/USD. When EUR/USD falls, DXY usually rises.
It also leaves out some big trading partners, such as China and Mexico. So DXY is a useful gauge, not the full picture of the dollar.
What moves it
- The Fed. Higher US rates, or the hint of them, tend to pull money into dollars. FOMC statements at 2:00 pm ET, press conference at 2:30 pm.
- US data. CPI and the jobs report, both at 8:30 am ET, reset rate expectations.
- The ECB. Because the euro is over half the basket, ECB decisions (usually 8:15 am ET) move DXY too.
- Risk mood. In some scares, investors rush into dollars as a Safe haven. Not every time.
- The yen. At 13.6%, big moves in USD/JPY show up too.
When it's busiest
DXY follows the forex market, which trades from Sunday evening to Friday 5 pm ET.
- Asia hours (evening ET): usually quiet.
- 3:00 am ET onward: Europe opens and activity rises.
- 8:00 am – noon ET: the London–New York overlap and US data, the busiest stretch.
Europe and the US change clocks on different dates in spring and fall. For those weeks, European hours shift an hour in ET. Our market hours tool does the math.
Its personality
- Slow and broad. As a basket, it usually moves less day to day than a single currency pair.
- Long trends. Dollar cycles tied to rate gaps can last years.
- A ripple effect. A strong dollar can weigh on gold (priced in dollars), on US companies that sell abroad, and on many foreign currencies.
How traders use it
Most beginners use DXY as a check, not a trade.
- Before a EUR/USD or GBP/USD trade: is the dollar itself trending? If DXY is breaking higher, a buy on EUR/USD is fighting the tide.
- Before a gold trade: a rising dollar often works against GLD and gold.
Reading it with our method
Mark the last places DXY turned around on the daily chart. Higher highs and higher lows, or lower ones? That tells you which way the dollar leans.
A level only breaks when a candle body closes past it. If you trade a pair, set your stop on that pair's chart and size from it with the pip value calculator.
Common mistakes
- Calling DXY "the dollar against the world". It's six currencies, mostly the euro.
- Trading a pair against DXY's trend without noticing. Check it first.
- Expecting a strong dollar to mean the same thing everywhere. It can rise against the euro while falling against the yen.
- Mixing up DXY and the futures contract. The index is a calculation; the futures are what trade.
Questions
What currencies are in the DXY?
Six: the euro (57.6%), Japanese yen (13.6%), British pound (11.9%), Canadian dollar (9.1%), Swedish krona (4.2%) and Swiss franc (3.6%).
What does it mean when DXY goes up?
The dollar is getting stronger against that basket, mostly against the euro.
Why does gold often fall when DXY rises?
Gold is priced in dollars. A stronger dollar makes gold more expensive for buyers using other currencies, which can weigh on demand.
Can you trade the DXY?
Not the index itself. US Dollar Index futures trade on ICE Futures U.S., and some ETFs track the dollar. Many forex traders simply use it as a guide.
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