MarketCrash

US Dollar Index (DXY) — Dollar Strength Chart

The world's reserve currency sets the tone for global markets. When the dollar surges, emerging markets tremble and commodities fall. When it weakens, a different playbook wins. Know which regime you're in.

US Dollar Index (DXY)

Measures the value of the US dollar against a basket of major currencies. For growth analysis, lower DXY change indicates better conditions for market growth.

Thresholds (3-month % change): Negative >1% • Warning ≥-1% • Positive <-1%

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What Is the US Dollar Index?

The DXY measures the US dollar's value against a basket of 6 major trading-partner currencies. Established in 1973, it serves as the primary benchmark for dollar strength globally.

Currency Weights:

  • Euro (EUR): 57.6%
  • Japanese Yen (JPY): 13.6%
  • British Pound (GBP): 11.9%
  • Canadian Dollar (CAD): 9.1%
  • Swedish Krona (SEK): 4.2%
  • Swiss Franc (CHF): 3.6%

Key Levels:

  • Below 90: Weak dollar — commodity boom territory
  • 90-100: Neutral range
  • 100-110: Strong dollar — EM pressure
  • Above 110: Very strong — global stress risk

How Dollar Strength Impacts Markets

Strong Dollar (Rising DXY)

  • US multinational earnings hurt by currency conversion
  • Commodity prices fall (priced in dollars)
  • Emerging market debt stress increases
  • US imports become cheaper, exports more expensive

Weak Dollar (Falling DXY)

  • Boosts US corporate earnings abroad
  • Commodity prices typically rise
  • Emerging markets and international stocks rally
  • Can signal inflation concerns if sustained

What Drives Dollar Strength?

Interest rate differentials between the Fed and other central banks are the primary driver. When the Fed raises rates faster than the ECB or BOJ, capital flows into dollar assets for higher yields. Geopolitical uncertainty also drives safe-haven flows into the dollar, while persistent trade deficits weigh on it long-term.

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US Dollar Index data provided for educational purposes only. Not investment advice.