Understanding the U.S. Dollar Index
βοΈ αααααΉαααααΆαα
– αααααααααααααΆαααα»ααααΆαα’αΆαααα·α ααΊβααΆβαααααΆααβααβαααααβααααΆααβαα»ααααΆαβα’αΆαααα·α αααβααΆααααβααΉαβαααα
ααβααΌαα·ααααααβαααααα
– αααααααααααααΆαααα»ααααΆαα’αΆαααα·αααααΌαααΆααααααααααΌαα·αααααααααααα
ααα½α α¦α
– αααααααα»αααΆαααΎααα·αααααααααααααααααααΆαααα»ααααΆαα’αΆαααα·α
– αααααΆαααααΆαα₯αααα·ααααΎαααααααααααααΆαααα»ααααΆαα’αΆαααα·α
– αα»ααααααααα· αα·ααα»ααα·ααααα·αααααααααααααααΆαααα»ααααΆαα’αΆαααα·α
βοΈ ααααααααααΈαα·αααααα U.S. Dollar Index
αααααααααααααΆαααα»ααααΆαα’αΆαααα·α ααΊβααΆβαααααΆααβααβαααααβααααΆααβαα»ααααΆαβα’αΆαααα·α αααβααΆααααβααΉαβαααα
ααβααΌαα·ααααααβαααααα USDX ααααΌαααΆααααααΎαα‘αΎαααα Federal Reserve αααααα ααααα’αΆαααα·ααααα»αααααΆα 1973α
βοΈ ααΎαααααααααααααΆαααα»ααααΆαα’αΆαααα·αααααΌαααΆααααααααααΌαα·αααααααααααααΆαααα?
αααααααααααααΆαααα»ααααΆαα’αΆαααα·αααααΌαααΆααααααααααΌαα·αααααααααααα
ααα½α α¦β ααΌα
ααΆα
– ααααΆααα’αΊαααΌ (EUR)
– ααααΆαααααα (JPY)
– ααα (GBP)
– αα»ααααΆαααΆααΆααΆ (CAD)
– ααααα (SEK)
– α αααααα(CHF)

βοΈ αααααααα»αααΆαααΎααα·αααααααααααααααααααΆαααα»ααααΆαα’αΆαααα·α
USDX ααΆαααααααααΌαα
ααααααααΆαααα»ααααΆααααααΆαααααα
ααΉαααΌαααααΆααα 100 α
α. αα
αααααααααααααααΆαααα»ααααΆαα’αΆαααα·αα‘αΎαααααα
α§αααΆααΆ ααααααα
αα
α»ααααααααΊ 130 αααααΆααααααΆααααΆαααα»ααααΆαααΆαααΎαα‘αΎα 30% α
αΆααααΆααααΈααΆαα
αΆααααααΎααααααααααααΎαααααΌα (130-100=30)α
ααααΆαααα»ααααΆαα’αΆαααα·αααΆαα‘αΎααααα 30% αααααΉααααα
ααααΌαα·ααααααα αα·ααΆαα±ααααΆαααα αααααααααΆαααα»ααααΆαα‘αΎααααα ααΎαααααααααα
ααΉαααΌαα·ααααααααααααααα
α. αα
αααααααααααααααΆαααα»ααααΆαα’αΆαααα·αα
α»αααααα
α§αααΆααΆ ααααααα
αα
α»ααααααααΊ 86 αααααΆααααααΆααααΆαααα»ααααΆαααΆαα
α»ααααα 14% α
αΆααααΆααααΈααΆαα
αΆααααααΎααααααααααααΎαααααΌα (86-100= -14 )α
ααααΆαααα»ααααΆαα’αΆαααα·αααΆαα
α»ααααα 14% αααααΉααααα
ααααΌαα·ααααααα αα·ααΆαα±ααααΆαααα αααααααααΆαααα»ααααΆαα
α»ααααα ααΎαααααααααα
ααΉαααΌαα·ααααααααααααααα
βοΈ αααααΆαααααΆαα₯αααα·ααααΎαααααααααααααΆαααα»ααααΆαα’αΆαααα·α
αααααααααααααΆαααα»ααααΆαα’αΆαααα·αααααΌαααΆααααααααααΆααααααααααΆαααΆααααΌααααααα·α
αα
ααααα½αααΆαα’αα·ααααΆ α¬ααα·αααααααΆααααΌαα·αααααααααααααααα½ααααα
αΌααααα»ααααα
ααααΌαα·αααααααααααααα ααααΌα
ααΆααΆαααααΆααα
α»αααααααααα·α
αα
αα·αααααΎαααααααα·α
αα
αα
αααα»αααααααααΆαααααα
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βοΈ αα»ααααααααα· αα·ααα»ααα·ααααα·αααααααααααααααΆαααα»ααααΆαα’αΆαααα·α
ααααΆαααα»ααααΆαα’αΆαααα·ααααααα’ααααααααααααα½αα
ααα½α ααα»ααααααααΆαααα’αα·αααααΆααα½αα
ααα½ααααααα
α. αα»ααααααααα·ααααααΆαααα»ααααΆαα‘αΎαααααα
ααΆαααΆαα
αΌαααΆαααααααααααΆαα αααα·ααααααα·ααα
ααααα αααααΆαα
αΌααα
αα ααααα’αΆαααα·αααΉαααΆαααααααααααΆα ααααα·αααΎααΌαα·ααααααααααα’αααααα·αααααΆαααααααααααΉαααααΆαααα»ααααΆαα
αααα»αα αα»αα
αααα»αααΆαα·ααΆααααααααααΎα’αΆααΈααααααα
αα ααααα’αΆαααα·αααΉαααα½αααΆαα’αααααααααααααΈααααΆαααα»ααααΆααααα‘αΎααααααααα
α. αα»ααα·ααααα·ααααααΆαααα»ααααΆαα‘αΎαααααα
ααααααΆαααα’αααααΆαα
ααα βααΆαβααΆαα
ααααΆααααααααα α αΎααααα·αβααα·αβαααα»αβαααα»αββααααβααΆαβαα
βαααααα
α§ααΆα αααα ααααα·αααΎαα ααααα’αΆαααα·αααΆαα
αΌαααααααααΈααααααααΆααΆαα αααααΆαααααα β¬60,000 αααα»ααα½αααααΏα ααΆαα½αααΉαα’ααααΆααααΌαααααΆαα $1.35 αααα»ααα½αα’αΊαααΌ αααααααααααΉαααΆαααααα $81,000 αααα»ααα½αααααΏαα αααα»ααααα·αβ ααααα·αααΎα’ααααΆααααΌαααααΆααααααΆααα
α»αααααααΉα $1.15 αααα»ααα½αα’αΊαααΌ ααααααααααααααΉαααΆαααααα $69,000 αααα»ααα½αααααΏα α
ααΌα
αααα ααααα·αααΎβααααΆααβαα»ααααΆαβααααβααΆαβα‘αΎαβαααα αααβαααααβααΆαα
αΌαββααΉαβααααβααααΆααα
α»αα αααααΆααα·αααα ααΎααΎααααααααΆαααααΆααααααα·α
αα
ααΆααααα·αααΆαααΌα
ααααΆα αΎααααααααααΆαααα»ααααΆαα’αΆαααα·αα‘αΎααααα ααααααα»αα αα»αα’αΆαααα·ααααααΆαα
αΌαααααα»ααΆαα»ααΎαααΈαααααααΉαααΆαααΆαα
αααΆαααα»αααΆααααααΆααααααααα·ααααα αα·αααα½αααΆαααααΆααα
ααααααΆαααααααααα
βοΈ αα·ααααααα
ααααααΆαααααΈα
U.S. Dollar Index (DXY): 102.17 (1 ααΈα αΆ 2023)
| English Version |
βοΈ Key takeaway
– The U.S. dollar index (USD) is a measure of the value of the U.S. dollar relative to a basket of foreign currencies.
– The US Dollar Index consists of six foreign currencies.
– How to read U.S. Dollar Index (USDX)?
– Factors that influence this indicator.
Advantages and disadvantages of the U.S. Dollar Index
βοΈ Understanding U.S. Dollar Index
The U.S. dollar index (USD) is a measure of the value of the U.S. dollar relative to a basket of foreign currencies. The USDX was established by the U.S. Federal Reserve in 1973
βοΈ What currencies are in the USDX Basket?
The US Dollar Index consists of six foreign currencies.
They are:
– Euro (EUR)
– Japanese Yen (JPY)
– British Pound (GBP)
– Canadian Dollar (CAD)
– Swedish Krona (SEK)
– Swiss Franc (CHF)

βοΈ How to read U.S. Dollar Index (USDX)?
USDX measures the dollar’s general value relative to a base of 100.
A. Appreciated Value
Current reading says 130, which means the dollar has risen 30% since the start of the index. (130-100=30)
The US dollar has appreciated 30% versus the basket of currencies over the time period. Simply put, if the USD goes up, that means the U.S. dollar is gaining strength or value when compared to the other currencies.
B. Depreciated Value
Current reading says 86, which means the dollar has fallen 14% since the start of the index. (86-100=-14 )
The US dollar has depreciated 14% versus the basket of currencies over the time period. Simply put, if the USD goes down, that means the U.S. dollar is weakening when compared to the other currencies.
βοΈ Factors that influence this indicator
The U.S dollar index is affected by macroeconomic factors, which include inflation or deflation in the dollar foreign currencies included in the comparable basket, as well as recessions and economic growth in those countries.
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βοΈ Advantages and disadvantages of the U.S. Dollar Index
The U.S. Dollar benefits some but negatively impacts others.
A. Advantages of a strong Dollar
Imports are cheaper: goods produced abroad and imported to the United States will be cheaper if the manufacturer’s currency falls in value compared to the dollar.
Multinationals that do business in the U.S. will benefit from a strengthening dollar.
B. Disadvantages of a strong Dollar
Exporters suffer: just as imports become cheaper at home, domestically produced goods become relatively more expensive abroad.
Example: If US imports cars from France, and the cost is β¬60,000 per car with an exchange rate of $1.35 per euro, then it will cost $81,000 per car. The same car selling for the same amount of euro would cost $69,000 if the exchange rate fell to $1.15 per euro.
So, if the dollar continues its strengthening trend, import prices will likely keep falling. Assuming the same steady economic factor, U.S. companies that import raw materials from abroad will have a lower total cost of production and enjoy a larger profit margin.
βοΈ Recent updates
U.S. Dollar Index (DXY): 102.17 (1st August 2023)