The U.S. dollar index is an indicator that comprehensively reflects the exchange rate of the U.S. dollar in the international foreign exchange market. It is used to measure the exchange rate changes of the U.S. dollar against a basket of currencies. It measures the strength of the U.S. dollar by calculating the combined rate of change of the U.S. dollar and a selected basket of currencies, thereby indirectly reflecting changes in U.S. export competitiveness and import costs. If the US dollar index falls, it means that the US dollar has depreciated against other major currencies.

The calculation principle of the U.S. dollar index futures is based on the trade settlement volume between major countries in the world and the United States, and calculates the overall strength of the U.S. dollar in a weighted manner, with 100 as the dividing line. . After the launch of the euro on January 1, 1999, the subject matter of this futures contract was adjusted and reduced from ten countries to six countries. The euro has also become the most important currency with the largest weight. It reached 57.6%. Therefore, the fluctuation of the euro has the greatest impact on the strength of the US dollar index.

Currency index weight (%)

Euro 57.6

Japanese yen 13.6

British pound 11.9

Canada Yuan 9.1

Swedish krona 4.2

Swiss franc 3.6

The U.S. dollar index USDX is a geometric average weighted value based on the changes in the exchange rates of six currencies against the U.S. dollar in March 1973. To calculate. Its value is measured against 100.00. The quote of 105.50 refers to a 5.50% increase in value since March 1973.

March 1973 was chosen as the reference point because it was a historic moment of turning point in the foreign exchange market. From that time on, major trading nations allowed their currencies to float freely against the currencies of other countries. The agreement, reached at the Smithsonian Institution in Washington, represents a victory for free trade ideologues. The Smithsonian agreement replaced the unsuccessful fixed exchange rate system agreed at Bretton Woods in New Hampshire some 25 years earlier.

Current USDX levels reflect the dollar's average relative to its 1973 base point. So far, the U.S. dollar index has risen as high as 165 points and as low as below 80 points.

This change characteristic is widely compared to futures stock indexes in terms of volume and rate of change