DXY

The U.S. Dollar Index (DXY) is a weighted geometric mean index that measures the relative strength of the United States dollar against a basket of six major foreign currencies: the euro, Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc. Established in 1973 by the Federal Reserve Board, the index was created to provide a comprehensive gauge of the dollar's performance in international currency markets. The euro comprises the largest weighting in the index at approximately 57.6 percent, followed by the Japanese yen at 13.6 percent, with the remaining currencies making up smaller portions of the total weight. The DXY serves as a critical benchmark for understanding broad-based dollar strength relative to major trading partners and is widely used by policymakers, economists, and market participants to assess economic competitiveness and international trade dynamics. A rising DXY indicates that the dollar is strengthening relative to these currencies, while a declining index suggests dollar weakness. The index provides valuable insight into macroeconomic trends, capital flows, and the relative purchasing power of the dollar in global commerce.