The US Dollar Index (DXY) measures the dollar against a basket of six currencies.
Why it's useful
- It shows whether the dollar is moving, or just the other currency in your pair.
- If DXY is rising and EUR/USD is falling, it's a dollar story.
- If DXY is flat and EUR/USD is falling, it's a euro story.
Wick says
The euro is more than half the index, so DXY and EUR/USD often look like mirror images.
Key takeaways
- DXY = USD vs EUR, JPY, GBP, CAD, SEK, CHF.
- The euro has the biggest weight (57.6%).
- Use DXY to see if a move is about the dollar.