Dollar index (dollar index? USDX is an indicator that comprehensively reflects the exchange rate of the US dollar in the international foreign exchange market, and is used to measure the degree of exchange rate change of the US dollar against a basket of currencies. It measures the strength of the US dollar by calculating the comprehensive rate of change between the US dollar and a selected basket of currencies, thus indirectly reflecting the changes in US export competitiveness and import costs.
USDX is similar to Dow Jones Industrial Average, which shows the comprehensive situation of American stocks. The dollar index shows the comprehensive value of the dollar. An indicator to measure the strength of various currencies.
Surprisingly, the US dollar index is not from CBOT or CME, but from new york Cotton Exchange (NYCE). New york Cotton Exchange was founded in 1870, which was originally composed of a group of cotton merchants and middlemen. At present, it is the oldest commodity exchange in new york and the most important cotton futures and options exchange in the world. 1985, new york cotton exchange established the finance department, and officially entered the global financial commodity market. The first is the US dollar index futures.
The foreign currency and weight used by USDX are the same as the weighting index of US dollar transactions in the Federal Reserve System. Since USDX is only based on foreign exchange quotation indicators, it may be different due to the use of different data sources.
USDX is calculated with reference to the geometric average weighted value 1973 of the exchange rate changes of several major currencies against the US dollar in March, and its value is calculated based on 100.00. For example, the quotation of 105.50 points means that its value has increased by 5.50% since March 1973.
March 1973 was chosen as the reference point because it was a historic turning point in the foreign exchange market. Since then, major trading countries have allowed their currencies to float freely with the currencies of another country.
The agreement was reached at the Smithsonian Institution in Washington, D.C., symbolizing the victory of free trade theorists. The Smithsonian Agreement replaced the unsuccessful fixed exchange rate system reached in Bretton Woods, New Hampshire, USA in 1944.