Charting the U.S. Dollar Index (USDX)
Just like any currency pair, the U.S. Dollar Index (USDX) has its own chart. 📈
Say hello to the USDX chart!
How to Read the USDX Chart
The U.S. Dollar Index is updated 24 hours a day, five days a week, reflecting real-time changes in the dollar’s value compared to a group of major currencies.
The index is based on a starting value of 100.000, known as the base level, set back in March 1973.
That’s when the world’s major economies agreed to let their currencies float freely against one another—a big milestone in forex history.
What Do the Numbers Mean?
Let’s say the USDX reads 86.212 today.
That means the dollar has fallen 13.79% since the base period:86.212 - 100.000 = -13.788
If the index shows 120.650, it means the dollar has gained 20.65% since 1973:120.650 - 100.000 = +20.650
So, higher than 100? Dollar’s stronger.
Lower than 100? Dollar’s weaker.
The Geeky Stuff: USDX Formula
If you’re into formulas (or just want to impress someone at a trading party), here’s the actual calculation behind the index:
Each currency pair is given a specific weight, reflecting its influence in the index. The euro has the biggest impact, while others like the Swiss franc and Swedish krona play a smaller role.
Got all that? Great! Just watch out—your brain might qualify for a wedgie from the math police. 😄