Forex Questions and Answers - FXAnswer

The USD Index measures the performance of the US Dollar against a basket of currencies: EUR, JPY, GBP, CAD, CHF and SEK. It is a gauge of the performance of the US Dollar on the global stage.

The USD Index has been in use since 1973. The USDX measures the dollar’s general value relative to a base of 100.000.

Many analysts view ‘80’ as a psychological support level or the level that the US dollar should hold. If it goes lower, say ‘70’ then it means that the value of USD has devaluated against the basket of currencies. The impact could be that several institutions would begin to unload the dollar. If there is massive sell off of the dollar, the economic consequences would be dramatic.

by

fxpie

1 year ago

The index is calculated 24 hours a day, seven days a week. The USDX measures the dollar’s general value relative to a base of 100.000.

Okay. For example, the current reading says 86.212. This means that the dollar has fallen 13.788% since the start of the index. (86.212 - 100.000).

If the reading was 120.650, it means the dollar’s value has risen 20.650% since the start of the index. (120.650 – 100.00)

The start of the index is March 1973. This is when the world’s biggest nations met in Washington D.C. and all agreed to allow their currencies to float freely against each. The start of the index is also known as the “base period”.

The U.S. Dollar Index Formula
This is strictly for the grown and geeky. Here is the formula to calculating USDX:

USDX = 50.14348112 × EURUSD^(-0.576) × USDJPY^(0.136) × GBPUSD^(-0.119) × USDCAD^(0.091) × USDSEK^(0.042) × USDCHF^(0.036)

Source(s):

http://www.babypips.com/school/ how_to_read_the_us_dollar_inde.html

by

Suneetha

1 year ago

When USD Dollar Index going up, the market is likely in risk aversion mode because USD Index measures the performance of the US Dollar against a basket of currencies: EUR, JPY, GBP, CAD, CHF and SEK.

by

Kingpin

1 year ago

The USD Index measures the performance of the US Dollar against a basket of currencies: EUR, JPY, GBP, CAD, CHF and SEK.
The US Dollar Index(USDX) measures the dollar’s general value relative to a base of 100.000.
For example, the current reading says 86.212. This means that the dollar has fallen 13.788% since the start of the index. (86.212 - 100.000).
If the reading was 120.650, it means the dollar’s value has risen 20.650% since the start of the index. (120.650 – 100.00)

by

RPT

1 year ago