U.S. Dollar Index - USDX

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DEFINITION of 'U.S. Dollar Index - USDX'

A measure of the value of the U.S. dollar relative to majority of its most significant trading partners. This index is similar to other trade-weighted indexes, which also use the exchange rates from the same major currencies.

BREAKING DOWN 'U.S. Dollar Index - USDX'

Currently, this index is calculated by factoring in the exchange rates of six major world currencies: the euro, Japanese yen, Canadian dollar, British pound, Swedish krona and Swiss franc. This index started in 1973 with a base of 100 and is relative to this base. This means that a value of 120 would suggest that the U.S. dollar experienced a 20% increase in value over the time period.

It is possible to incorporate futures or options strategies on the USDX. These financial products currently trade on the New York Board Of Trade.

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RELATED FAQS
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    Generally speaking, when Country A's currency is worth more than that of Country B, it does not necessarily mean that Country ... Read Full Answer >>
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