US Dollar Index (DXY)
The dollar against a basket of majors — the master valve of global liquidity: a strong DXY pressures risk assets broadly; a weak one lifts almost everything.
What it is
The US Dollar Index (DXY) measures the dollar against a fixed basket of six currencies: EUR (57.6%), JPY (13.6%), GBP (11.9%), CAD (9.1%), SEK (4.2%), CHF (3.6%) — the post-Bretton-Woods 1973 baseline. It is not a single tradable asset (the futures version is the DX contract) but the master gauge of global money flow: a rising DXY = a scarce/strong dollar (repatriation or safe-haven flows); falling = abundant/weak.
Release schedule
| Item | Details |
|---|---|
| • | Frequency: continuous real-time quoting (ICE feed) — a standing state, not a "data event" |
| • | Weight structure: EUR is nearly 60% — EUR/USD alone largely is DXY (inverted) |
| • | Event drivers: FOMC decisions, CPI, NFP, and other major central banks (ECB/BOJ) |
| • | Related gauges: the 10-year Treasury yield (a real-rate proxy) and the Fed–ECB/BOJ rate differentials |
| • | Cycles: the dollar cycle historically runs 6–8 years, driven by rate differentials and global risk appetite |
Why it matters
DXY is the core variable of "global liquidity pricing": (1) dollar-priced assets (US equities, gold, oil, crypto) are naturally pressured when the dollar strengthens; (2) EM debt is dollar-denominated — a strong dollar raises EM repayment stress and shrinks global risk appetite; (3) rate differentials — the higher US rates sit relative to others, the more attractive the dollar. Hence the negative correlation of DXY with the S&P 500, gold and bitcoin is entry-level macro knowledge.
Impact across assets
Typical medium-term correlations by DXY direction (correlation, not causation):
| Asset | Typical impact |
|---|---|
| US equities | Strong dollar → translation drag on multinationals + tighter liquidity → pressure (tech with overseas revenue most); weak dollar → benefits |
| Gold | Strong dollar → gold pressured (the most classic negative pair); weak dollar → a key tailwind for gold bull markets |
| Oil & commodities | Same logic as gold: the dollar is the pricing currency — strong dollar = dearer for non-US buyers = demand pressure |
| Crypto | The negative correlation has been pronounced in recent years: strong dollar = tighter liquidity = crypto pressure; dollar tops often mark crypto bottoms |
| EUR/JPY | Definitionally inverse to DXY — every DXY move is the mirror image in EUR/USD |
How to read it
Reading DXY (levels and drivers):
| Dimension | How to read it |
|---|---|
| The 100 pivot | The historical center: 100±5 dominated the 2020s — a sustained break of 105 or 98 usually rides a trend driver |
| Moving with real rates | Rising real yields (10Y TIPS) → stronger DXY is the classic transmission; divergence hints at another force (haven flows / intervention) |
| Inverse to risk assets | Fast DXY rallies typically pressure the S&P, gold and bitcoin — a "dollar squeeze" = tightening liquidity |
| Differential-driven | The Fed vs ECB/BOJ policy gap anchors the medium-term trend — a narrowing gap is a dollar-top signal |
The advanced homework is driver decomposition: for every big move ask "was this rate-differential-driven, haven-driven or intervention-driven" — their persistence differs completely (differentials last; interventions fade).
Limitations & common mistakes
- Correlation is not causation: the DXY/risk correlation comes from shared macro drivers (rate expectations) — hedging on the correlation alone is a classic error.
- The euro-weight trap: at 57.6%, "strong dollar" often just means "weak euro" (a more dovish ECB) — read what the euro is doing alongside DXY.
- 2022-style twin selloffs: in extreme strong-dollar regimes the negative correlation can fail exactly when portfolios need it.
- Underestimating technical levels: round numbers (100/105/110) and chart patterns carry heavy trader consensus — layering macro on key levels improves odds.
- Nominal vs real: DXY is a nominal index — purchasing-power comparisons need the real effective exchange rate (REER); inflation differentials bend the nominal index away from PPP.
Related macro data
How it links to other macro data:
- With the Fed decision: FOMC is the biggest medium-term DXY driver — DXY volatility peaks on rate-path repricing days. fed-rate
- With CPI: inflation differentials underpin rate differentials — US CPI relative to other economies sets the dollar's medium-term direction. cpi
- With geopolitical risk: haven flows into the dollar during crises add a driver unrelated to rates — the second engine of DXY spikes. geopolitics
Symbols most sensitive to US Dollar Index
Symbol pages that list this data as a factor to watch:
FAQ
Q What is DXY made of, and why is the euro so heavy?
Six fixed weights: EUR 57.6%, JPY 13.6%, GBP 11.9%, CAD 9.1%, SEK 4.2%, CHF 3.6% — set by 1973 US trade patterns and never updated. With EUR at nearly 60%, EUR/USD is basically DXY inverted.
Q Can I trade DXY directly?
Not the index itself, but its futures version (ICE's DX contract) and ETF proxies (UUP/UDN) exist. Most traders express dollar views via EUR/USD and other pairs, or the futures.
Q Why does gold fall when the dollar strengthens?
Three channels: gold is dollar-priced (a stronger dollar raises the cost for non-US buyers); the dollar and Treasuries compete as safe assets (strong dollar often comes with higher real rates — the opportunity cost of gold); and allocation flows rotate between them. The historical correlation runs about −0.4 to −0.7 but is not constant (both can rally in crises as havens).
Q What signals a dollar top?
The classic combo: the Fed–ECB/BOJ differential starting to narrow (others turning hawkish); improving global dollar liquidity; a technical break (trendline/previous low); and risk assets (gold, EM, crypto) starting to resist a still-strong dollar.
Q How much does DXY affect the instrument I trade?
Almost everything: US equities (translation), gold/oil/commodities (pricing currency), crypto (liquidity proxy), non-US FX (definitionally inverse). Symbol pages' "macro data to watch" tags flag dollar-sensitive instruments (gold/oil/crypto) where DXY is a must-check.
Turn MT5 / MT4 into a Tray Tool
Check quotes, manage positions, and hide in one click.
Download Camovia TrayThis page is educational content about macroeconomic data. It is not investment advice. Macro impacts involve multiple interacting factors — always combine them with your own risk management.