The US Dollar Index measures the dollar against six currencies, and the euro makes up more than half of it. How it is calculated, how it relates to gold and EUR/USD, and how traders use it.
Data from the Bank for International Settlements show that in April 2025 the US dollar was on one side of 89.2% of all foreign exchange trades. When the dollar moves, it moves gold, oil, the euro and many other markets with it. But the dollar has no single price. It has a different exchange rate against every other currency. The US Dollar Index, usually called the DXY, combines six of those rates into one number.
What the DXY is
The US Dollar Index (ticker DXY, sometimes USDX) measures the value of the dollar against a fixed basket of six currencies. ICE (Intercontinental Exchange) calculates and publishes it.
The index started in March 1973 at 100.000, shortly after the end of the Bretton Woods system of fixed exchange rates. A reading above 100 means the dollar is stronger against this basket than it was in March 1973. A reading below 100 means it is weaker. The index peaked above 160 in 1985 and fell close to 71 in 2008.
The basket has changed once. In 1999 the euro replaced the German mark, the French franc and the other European currencies that had been in it.
The six currencies in the basket
The euro makes up more than half of the index.
Currency | Code | Weight |
|---|---|---|
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% |
Source: ICE. The weights were set in 1999 and have not changed since.
The weights reflect US trade patterns in the early 1970s. That is why Europe carries so much weight, and why currencies of large trading partners today, such as the Chinese yuan and the Mexican peso, are not in the index at all.
Because the euro is more than half of the index, the DXY moves roughly as the inverse of EUR/USD. Most of what moves the euro against the dollar also moves the DXY.
How the DXY is calculated
The index is a weighted geometric mean of six exchange rates. Each rate is raised to the power of its weight, and the results are multiplied together with a fixed constant:
DXY = 50.14348112 × EURUSD^(-0.576) × USDJPY^(0.136) × GBPUSD^(-0.119) × USDCAD^(0.091) × USDSEK^(0.042) × USDCHF^(0.036)
Two details explain how it behaves.
The signs show direction. EUR/USD and GBP/USD are quoted in dollars per euro or per pound. When they rise, the dollar is falling, so they carry negative powers and pull the index down. The other four pairs are quoted in units per dollar, so they carry positive powers.
The weights are fixed. Unlike a share index, the DXY does not rebalance.
You can check the effect of each currency with the formula. Measured that way, if EUR/USD rises 1% and the other five rates do not move, the index falls by about 0.57% (1.01 to the power of -0.576 is 0.9943). If USD/JPY rises 1% on its own, the index rises by about 0.14% (1.01 to the power of 0.136 is 1.0014). A move in the euro has about four times the effect of the same move in the yen.
How traders use the DXY
As a read on the dollar as a whole
The DXY shows whether the dollar is broadly rising or falling before you look at a single pair. If EUR/USD is falling but USD/JPY, GBP/USD and the other pairs are flat, the move is about the euro. If the DXY is rising too, the move is about the dollar.
Alongside gold
Gold is priced in dollars. When the dollar strengthens, gold costs more for buyers who pay in euros, yen or other currencies, demand from those buyers tends to fall, and the dollar price of gold tends to fall with it. When the dollar weakens, the reverse tends to happen. That is why many gold traders keep the DXY on a chart next to gold and other commodities.
The link does not always hold. In periods of market stress, investors can buy both the dollar and gold at the same time. Central-bank gold buying and changes in real interest rates can also move gold while the dollar is flat. Our guide to what moves the gold price covers those drivers.
Alongside EUR/USD
Because of the euro's weight, the DXY and EUR/USD usually move in opposite directions. When they do not, for example when EUR/USD rises but the DXY does not fall, the other currencies in the basket are moving and the euro's move may be narrower than it looks. Some traders wait for both to agree before acting. Our guide to what moves EUR/USD goes into the pair itself.
As a sign of risk appetite
The dollar is widely held as a safe currency in a crisis. When markets fall sharply or recession fears rise, investors often buy dollars and the DXY rises. When markets are calm, money tends to move into higher-yielding currencies and assets, and the DXY tends to soften. This is a tendency. It does not tell you what will happen next.
Trading a view on the dollar
The DXY itself is an index, and futures on it trade on ICE Futures U.S. under the ticker DX. Most retail traders who want to act on a view of the dollar trade the currency pairs that make up most of the index.
If you expect the dollar to strengthen, the usual trades are selling EUR/USD or buying USD/JPY. If you expect it to weaken, the reverse. Because EUR/USD is more than half of the index, it is the closest single-pair match. A dollar view can also be expressed through gold, with the DXY used as a check on whether the dollar is doing what you expect.
To see whether a dollar-index CFD is listed on your account, search the symbol list in MT5 Market Watch. The contract specification there shows what the symbol is priced from, its contract size and its trading hours.
Trading dollar pairs with NAMH Global
You can trade EUR/USD, USD/JPY, GBP/USD and other forex pairs, as well as gold, as CFDs on MetaTrader 5 with NAMH Global, among 2,100+ instruments. Our guide to forex leverage explains margin and leverage if they are new to you.
CFDs use leverage. You can lose money quickly, and you can lose all of the money you deposit. Only trade with money you can afford to lose.
DXY questions
What currencies are in the US Dollar Index?
The DXY measures the dollar against six currencies. Their weights in the ICE formula (source: ICE) are the euro (57.6%), the Japanese yen (13.6%), the British pound (11.9%), the Canadian dollar (9.1%), the Swedish krona (4.2%) and the Swiss franc (3.6%). Because the euro has the largest weight, the index moves roughly as the inverse of EUR/USD.
Why does the DXY often move opposite to gold?
Gold is priced in dollars, so when the dollar rises, gold costs more for buyers using other currencies, and the dollar price of gold tends to fall. The link does not always hold. In periods of stress, the dollar and gold can rise together.
Is a rising DXY good or bad for EUR/USD?
A rising DXY usually means EUR/USD is falling, because the euro is more than half of the index. The two are close to mirror images but not exact, because the other five currencies also move the index.
Can I trade the DXY on MT5?
Not as the index itself: the DXY is an ICE index, and futures on it trade on ICE Futures U.S. Traders who want a view on the dollar usually trade the pairs that make up most of the index, such as EUR/USD and USD/JPY. To see whether a dollar-index CFD is offered on your account, search the symbol list in MT5 Market Watch.
What is a high or low DXY reading?
There is no fixed threshold; the index started at 100.000 in March 1973, so a reading above 100 means the dollar is stronger against this basket than it was then. It peaked above 160 in 1985 and fell close to 71 in 2008.
Where does the DXY data come from?
ICE (Intercontinental Exchange) calculates and publishes the index. The exchange rates in it are published by many sources, including the Federal Reserve's H.10 release.
Sources
- OTC foreign exchange turnover in April 2025, Bank for International Settlements
- Foreign exchange rates (H.10), Federal Reserve
- US Dollar Index (DXY) chart, TradingView
NAMH Global Ltd is a company registered in Saint Lucia (No. 2024-00372). It is not licensed by a securities regulator. This article is general information, not investment advice or a recommendation.