{"id":7980,"date":"2021-04-15T17:30:55","date_gmt":"2021-04-15T14:30:55","guid":{"rendered":"https:\/\/roboforex.com\/blog\/?p=7980"},"modified":"2026-09-25T16:24:38","modified_gmt":"2026-09-25T13:24:38","slug":"how-to-use-the-us-dollar-index-in-forex-trading","status":"publish","type":"post","link":"https:\/\/roboforex.com\/blog\/education\/how-to-use-the-us-dollar-index-in-forex-trading\/","title":{"rendered":"How to Use the US Dollar Index (DXY) in Forex Trading"},"content":{"rendered":"\n
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The US Dollar Index (DXY)<\/strong> measures the value of the US dollar against a basket of six currencies: the euro, the yen, the pound, the Canadian dollar, the Swedish krona and the Swiss franc. In forex it works as a gauge of the dollar trend. When DXY rises, pairs such as USD\/JPY<\/a> usually rise and pairs such as EUR\/USD<\/a> usually fall.<\/p>\n

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TL;DR<\/div>\n
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  1. Check the trend on the DXY chart before you trade any pair with the US dollar in it.<\/li>\n
  2. Buy the dollar against other currencies while DXY trends up, and sell it while DXY trends down.<\/li>\n
  3. Confirm a DXY pattern on a pair that follows the index, such as USD\/JPY, or moves against it, such as EUR\/USD.<\/li>\n <\/ol>\n<\/div>\n

    In this article, you’ll be introduced to the US Dollar index<\/a>, which shows dynamic patterns<\/a> of the American currency and helps to find additional signals<\/a> for Forex trading.<\/p>\n

    <\/span>What Is the US Dollar Index?<\/span><\/h2>\n

    The US Dollar index<\/strong> (DXY<\/strong> or USDX<\/strong>) is an aggregated indicator of the leading global currency cost relative to a basket of other foreign currencies. Technically, the index can be compared with stock indices<\/a>, such as Dow Jones<\/a> or S&P 500<\/a>. Stock indices track the stock market, while DXY shows the USD rate relative to other currencies and its current calculated value.<\/p>\n

    The US Dollar index started trading in 1973, soon after the dismantling of the Bretton Woods system. Its base value was 100.00. For example, if the index grows up to 110.00, it means that the value of the dollar increased by 10% relative to its base value. Starting from 1973, the index’s high was 160.00, while the year 2008 showed an all-time low at 70.00.<\/p>\n

    \"US<\/a>
    US Dollar index price chart<\/figcaption><\/figure>\n

    Apart from the major US Dollar index, there are other indices: the Bloomberg dollar index, the Wall Street Journal dollar index, etc. All of them are highly correlated to each other and measure the same thing (the US dollar value) but their calculation formulae are quite different, that’s why they show pretty close but not always the same results.<\/p>\n

    In this article, we’ll talk about the major and classic US Dollar index (DXY). However, the basic idea of any other US Dollar index will be pretty similar.<\/p>\n\n

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    <\/span>What Does the US Dollar Index Consist Of?<\/span><\/h2>\n

    The US Dollar index value is calculated as an average weighted geometric mean of the USD exchange rate relative to a basket of six foreign currencies. Each of these currencies belongs to a country, which is a key trade and economic partner<\/a> of the USA. These currencies are used for calculating the US Dollar index with a different weight percentage:<\/p>\n