The USDX Basket

The USDX basket comprises six major foreign currencies systematically weighted against the U.S. Dollar. These currencies—Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona, and Swiss Franc—represent 24 countries, providing a comprehensive snapshot of the dollar’s standing in global markets. Notably, the Euro’s prominence, spanning 19 countries, reinforces its influence on the USDX’s overall movement.

Trading Options for the USDX

Traders can engage with the U.S. Dollar Index through futures contracts or opt for an exchange-traded fund (ETF). The Intercontinental Exchange Group (ICE), a global powerhouse in trade clearing, serves as the exclusive custodian of the U.S. Dollar Index. Since 1985, ICE has diligently compiled the data essential for the functioning of the USDX, making it a cornerstone in the Forex trading landscape.

ICE U.S. Dollar Index: A Global Benchmark

Recognized as a trademark of ICE Futures U.S. Inc., the U.S. Dollar Index is synonymous with the Intercontinental Exchange Group. Boasting a vast global presence, ICE operates in nine asset classes and facilitates trades across various markets. The ICE U.S. Dollar Index, available for trading 21 out of 24 hours each day, witnesses a staggering turnover of approximately $2 trillion daily, underscoring its liquidity and popularity among traders.

USDX vs. DX vs. DXY: Decoding the Abbreviations

Navigating discussions about the U.S. Dollar Index may lead to encounters with abbreviations such as USDX, DX, and DXY. USDX serves as the overarching term, encompassing all aspects related to the U.S. Dollar Index. DX represents the symbol employed by ICE for futures contracts, while DXY is the Bloomberg Terminal’s shorthand for the Dollar Index, commonly used by traders for real-time market discussions.

Components and Weighting of the USDX:

To comprehend the U.S. Dollar Index fully, one must grasp its currency composition and weighting. The Euro holds the lion’s share at 57.6%, reflecting its extensive use across 19 countries. The Japanese Yen follows at 13.6%, owing to Japan’s robust economy. The British Pound, Canadian Dollar, Swedish Krona, and Swiss Franc contribute to the remaining percentages. The Euro’s substantial weight often translates to a pronounced impact on the USDX’s overall movement.

Adjustments and Calculation

Since its inception, the U.S. Dollar Index has undergone a single adjustment—incorporating the Euro as the common currency for European bloc countries. While adjustments are at the discretion of ICE, there are no regular schedules for recalibration. The USDX’s value is recalculated every 15 seconds, with the pricing determined by market-traded contracts.

Real-Time Data Sources for the USDX

Accessing real-time values of the U.S. Dollar Index is exclusive to platforms such as WebICE, a subscription service, and select market data vendors. While some vendors require subscription fees, financial data providers like CNBC, Bloomberg, MarketWatch, the Wall Street Journal, and popular trading platforms like TradingView offer delayed pricing for broader accessibility.

Conclusion

In essence, the U.S. Dollar Index stands as a paramount benchmark, providing traders with valuable insights into the dollar’s performance against a diverse range of global currencies. As a creation of the Intercontinental Exchange Group, the USDX exemplifies liquidity, accessibility, and accuracy, making it an indispensable tool for Forex traders navigating the intricacies of the international financial landscape.

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