US Dollar Index: Measurement of USD Value Against Basket of Currencies

US Dollar Index: Measurement of USD Value Against Basket of Currencies

US Dollar Index is for sure one of the most closely watched financial indices globally due to the importance of Forex market and USD currency itself.

the US Dollar Index (symbol: USDX) measures value of U.S. Dollar compared to basket of six other major global currencies with the following approximate weights: EUR 58%, JPY 14%, GBP 12%, CAD 9%, SEK 4%, and CHF 3%. The Index goes up if USD gains its value compared to other currencies and vice versa. Basket of foreign currencies is stable and has changed only in 1999 when EUR was included. There are various financial instruments following the US Dollar Index as underlying, so investors and traders are able to gain exposure to USDX by trading futures, options, ETFs, and even mutual funds.

Following you can pick one of the most popular U.S. Dollar exchange rates to get the current quote and real-time daily chart of selected FX pair:

 

USD/EUR | USD/JPY | USD/AUD | USD/CAD | USD/CHF | USD/CZK | USD/DKK | USD/GBP | USD/HRK | USD/HUF | USD/NOK | USD/PLN | USD/SEK |

 

USD/EUR =

 

Quotes and charts may be delayed and are provided solely for informational and not for trading purposes or advice.

About the US Dollar Index

US Dollar IndexThe United States Dollar is the most widely used currency in international transactions and number one reserve currency in the World. USD is also used as standard unit of currency in commodities trading, like for example gold, silver, and oil. It is interesting that also some of the big international companies, although not headquartered in U.S., use USD for listing their official prices on all their markets (e.a. Airbus).

When speaking of USD as the prime reserve currency it means that central banks in most countries and other financial institutions and holdings from all over the world hold their free cash mostly in U.S. dollars, while as the second reserve currency they mostly use Euro.

According to some popular economists, the high overseas demand over U.S. dollars allows United States to maintain persistent trade deficit while not influencing the value of the USD at the same time.

One of the US economic policies is also the strong dollar policy based on the assumption that strong USD is in the interest of US and other countries as well. Strong dollar is also used as a magnet for foreign bondholders, to increase their investments over period of time. In combination with low inflation and high foreign investments, USD is maintaining its primer role in global financial system (for now).

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