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.
Real-time quote (ICE)
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.
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