FX
DXY — US dollar index
DXY
What it is
Index measuring USD value against a basket of 6 main currencies (EUR 57.6%, JPY 13.6%, GBP 11.9%, CAD 9.1%, SEK 4.2%, CHF 3.6%). Base 100 in March 1973.
How to read it
A rising DXY = strong dollar, pressure on commodities, EM, and US multinational international earnings. A falling DXY = tailwind for the same categories. One of the most watched macro barometers.
Common reference points
- Weak dollar< 95
- Normal95 – 105
- Strong dollar — pressure105 – 115
- Very strong — systemic stress> 115
Orders of magnitude, not a rule: the same number does not mean the same thing from one sector to the next.
What it does not tell you
DXY is dominated by the euro (57.6%) — an EUR/USD move weighs as much as all the others combined. The US Broad Dollar Index (FRED) is more representative of global trade flows.
Other measures — FX
Educational content. Polaris is not a registered investment adviser and makes no recommendation.