What Is the US Dollar Index (DXY) and Why Does It Matter to Forex Traders?
The US Dollar Index (DXY) measures the value of the US dollar against a basket of six major currencies, led by the euro at 57.6%. It started at 100 in March 1973, so a reading above 100 means the dollar is stronger than it was then against that basket. Forex traders use the DXY as a broad gauge of dollar strength, though its heavy euro weighting means it is not a full picture of the dollar’s value.