US Dollar Index
The US dollar index is a measure of the value of the United States dollar, used by traders, investors, and economists. In this guide, we explain its composition today, calculation, trading economics, and historical performance. We also explain how to trade the US dollar index with a list of the top brokers and platforms in 2025.
US Dollar Index Brokers
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Founded in Australia in 2010, Pepperstone is a highly regarded broker specialising in forex and CFDs. Serving more than 400,000 clients globally, it provides access to over 1,300 financial instruments through popular platforms like MT4, MT5, cTrader, and TradingView. Its fee structure is both low and transparent. With regulation by reputable bodies such as the FCA, ASIC, and CySEC, Pepperstone guarantees a safe trading environment for traders at every level.
Instruments Regulator Platforms CFDs, Forex, Currency Indices, Stocks, Indices, Commodities, ETFs, Crypto (only Pro clients), Spread Betting FCA, ASIC, CySEC, DFSA, CMA, BaFin, SCB MT4, MT5, cTrader, TradingView, AutoChartist, DupliTrade, Quantower Min. Deposit Min. Trade Leverage $0 0.01 Lots 1:30 (Retail), 1:500 (Pro) -
Founded in 2006, FxPro has built a reputation as a reliable non-dealing desk (NDD) broker, providing trading access across more than 2,100 markets to over 2 million clients globally. It has received over 100 industry awards, reflecting its favourable conditions for active traders.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities, Futures, Spread Betting FCA, CySEC, FSCA, SCB, FSA FxPro Edge, MT4, MT5, cTrader, AutoChartist, TradingCentral, DupliTrade, Quantower Min. Deposit Min. Trade Leverage $100 0.01 Lots 1:30 (Retail), 1:500 (Pro) -
Founded in 1974, IG is a part of IG Group Holdings Plc, a publicly listed brokerage (LSE: IGG). The company provides spread betting, CFD, and forex trading, offering access to over 17,000 markets. Its platforms and investing apps are notably user-friendly. Over the past 50 years, IG has consistently been an industry leader, excelling in all essential areas for traders.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto, Spread Betting FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOB, AFM Web, ProRealTime, L2 Dealer, MT4, TradingView, AutoChartist, TradingCentral, ProRealTime Min. Deposit Min. Trade Leverage $0 0.01 Lots 1:30 (Retail), 1:222 (Pro) -
eToro, a leading multi-asset platform, provides access to trading services across thousands of CFDs, stocks, and cryptocurrencies. Established in 2007, it boasts millions of active traders worldwide and is sanctioned by top-tier regulators such as the FCA and CySEC. It stands out for its extensive social trading feature. Crypto investments are unstable and carry risk. Tax implications might apply. Acknowledge the risks involved. 61% of retail CFD accounts incur losses.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, ETFs, Smart Portfolios, Commodities, Futures, Crypto, NFTs FCA, ASIC, CySEC, FSA, FSRA, MFSA, CNMV, AMF eToro Web, CopyTrader, TradingCentral Min. Deposit Min. Trade Leverage $50 $10 1:30 -
Eightcap, an acclaimed broker regulated by the FCA, offers exceptionally low trading costs. Recognised as the top-rated brand by TradingView's vast user base of 100 million, traders can directly access the platform. UK traders can open a live account with a minimum deposit of just £100.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities ASIC, FCA, CySEC, SCB MT4, MT5, TradingView Min. Deposit Min. Trade Leverage £100 0.01 Lots 1:30 -
Established in 2009, Vantage provides trading on more than 1,000 short-term CFD products to over 900,000 clients. Forex CFDs are available from 0.0 pips on the RAW account via TradingView, MT4, or MT5. Regulated by ASIC, Vantage ensures that client funds are kept in separate accounts. Traders looking to copy strategies will benefit from a wide array of social trading tools.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities, ETFs, Bonds, Spread betting FCA, ASIC, FSCA, VFSC ProTrader, MT4, MT5, TradingView, DupliTrade Min. Deposit Min. Trade Leverage $50 0.01 Lots 1:30 -
Founded in 1983, City Index is a prestigious broker, now under the Nasdaq-listed StoneX Group. It excels in forex, CFDs, and spread betting. With access to over 13,500 instruments, City Index provides a dynamic Web Trader platform, exceptional educational materials, and round-the-clock support five days a week, ensuring a thorough trading experience.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities, Crypto, Futures, Options, Bonds, Interest Rates,ETFs,Spread Betting FCA, ASIC, CySEC, MAS Web Trader, MT4, TradingView, TradingCentral Min. Deposit Min. Trade Leverage $0 0.01 Lots 1:30
Pepperstone
FXPro
IG Index
eToro
Eightcap
Vantage FX
City IndexSafety Comparison
Compare how safe the US Dollar Index are and what features they offer to protect traders.
| Broker | Trust Rating | FCA Regulated | Negative Balance Protection | Guaranteed Stop Loss | Segregated Accounts |
|---|---|---|---|---|---|
| Pepperstone | ✔ | ✔ | ✘ | ✔ | |
| FXPro | ✔ | ✔ | ✘ | ✔ | |
| IG Index | ✔ | ✔ | ✔ | ✔ | |
| eToro | ✔ | ✔ | ✘ | ✔ | |
| Eightcap | ✔ | ✔ | ✘ | ✔ | |
| Vantage FX | ✔ | ✔ | ✘ | ✔ | |
| City Index | ✔ | ✔ | ✔ | ✔ |
Payments Comparison
Compare which popular payment methods the US Dollar Index support and whether they have trading accounts denominated in British Pounds (GBP).
| Broker | GBP Account | Debit Card | Credit Card | Neteller | Skrill | Apple Pay |
|---|---|---|---|---|---|---|
| Pepperstone | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ |
| FXPro | ✔ | ✘ | ✔ | ✔ | ✔ | ✘ |
| IG Index | ✔ | ✔ | ✔ | ✘ | ✘ | ✘ |
| eToro | ✔ | ✔ | ✘ | ✔ | ✔ | ✘ |
| Eightcap | ✔ | ✔ | ✔ | ✔ | ✔ | ✘ |
| Vantage FX | ✔ | ✔ | ✔ | ✔ | ✔ | ✘ |
| City Index | ✔ | ✔ | ✔ | ✘ | ✘ | ✘ |
Mobile Trading Comparison
How good are the US Dollar Index at mobile trading using apps or other mobile interfaces.
| Broker | Mobile Apps | iOS Rating | Android Rating | Smart Watch App |
|---|---|---|---|---|
| Pepperstone | iOS & Android | ✘ | ||
| FXPro | iOS & Android | ✘ | ||
| IG Index | iOS & Android | ✔ | ||
| eToro | iOS & Android | ✘ | ||
| Eightcap | iOS & Android | ✘ | ||
| Vantage FX | iOS & Android | ✘ | ||
| City Index | iOS & Android | ✘ |
Beginners Comparison
Are the US Dollar Index good for beginner traders, that might want an affordable setup to get started, along with good support and educational resources?
| Broker | Demo Account | Minimum Deposit | Minimum Trade | Support Rating | Education Rating |
|---|---|---|---|---|---|
| Pepperstone | ✔ | $0 | 0.01 Lots | ||
| FXPro | ✔ | $100 | 0.01 Lots | ||
| IG Index | ✔ | $0 | 0.01 Lots | ||
| eToro | ✔ | $50 | $10 | ||
| Eightcap | ✔ | £100 | 0.01 Lots | ||
| Vantage FX | ✔ | $50 | 0.01 Lots | ||
| City Index | ✔ | $0 | 0.01 Lots |
Advanced Trading Comparison
Do the US Dollar Index offer features that allow for more advanced trading strategies?
| Broker | Automated Trading | Pro Account | Leverage | VPS | AI | Low Latency | Extended Hours |
|---|---|---|---|---|---|---|---|
| Pepperstone | Expert Advisors (EAs) on MetaTrader | ✔ | 1:30 (Retail), 1:500 (Pro) | ✔ | ✔ | ✔ | ✘ |
| FXPro | Expert Advisors (EAs) on MetaTrader, cBots on cTrader | ✔ | 1:30 (Retail), 1:500 (Pro) | ✔ | ✘ | ✔ | ✘ |
| IG Index | Expert Advisors (EAs) on MetaTrader, build your own on ProRealTime | ✔ | 1:30 (Retail), 1:222 (Pro) | ✔ | ✘ | ✔ | ✔ |
| eToro | Automate your trades via CopyTrader - follow profitable traders. Open and close trades automatically when they do. | ✘ | 1:30 | ✘ | ✔ | ✘ | ✔ |
| Eightcap | TradingView Bots | ✘ | 1:30 | ✔ | ✘ | ✔ | ✘ |
| Vantage FX | Myfxbook AutoTrade, Expert Advisors (EAs) on MetaTrader | ✘ | 1:30 | ✔ | ✘ | ✘ | ✘ |
| City Index | Expert Advisors (EAs) on MetaTrader | ✔ | 1:30 | ✘ | ✔ | ✔ | ✔ |
Detailed Rating Comparison
Use this heatmap to compare our detailed ratings for all of the US Dollar Index.
| Broker | Trust | Platforms | Mobile | Assets | Fees | Accounts | Support | Research | Education |
|---|---|---|---|---|---|---|---|---|---|
| Pepperstone | |||||||||
| FXPro | |||||||||
| IG Index | |||||||||
| eToro | |||||||||
| Eightcap | |||||||||
| Vantage FX | |||||||||
| City Index |
Our Take On Pepperstone
"Pepperstone is a premier trading platform, providing tight spreads, swift execution, and sophisticated charting tools for seasoned traders. Beginners benefit from no minimum deposit, comprehensive learning materials, and outstanding 24/7 support."
Tobias Robinson
Reviewer
Pros
- Over the years, Pepperstone has consistently garnered recognition from DayTrading.com’s annual awards. Recently, it was honoured as the 'Best Overall Broker' in 2025 and was the 'Best Forex Broker' runner-up the same year.
- Support for top-tier charting platforms such as MT4, MT5, TradingView, and cTrader. These tools accommodate different short-term trading methods, including algorithmic trading.
- The award-winning customer support can be accessed through phone, email, or live chat. During tests, response times have consistently been under 5 minutes.
Cons
- Pepperstone doesn't offer cTrader Copy, a favoured feature for copying trades found in the cTrader platform, which is available on other platforms such as IC Markets. However, Pepperstone has launched its own user-friendly copy trading app.
- Although its market range has improved, its crypto offerings remain limited compared to brokers specialising in this sector, lacking real coin investment options.
- Pepperstone's demo accounts expire after 30 days, which may not provide sufficient time to explore various platforms and evaluate trading strategies.
Our Take On FXPro
"FxPro is an excellent choice for traders, offering swift execution speeds under 12ms, reduced fees since 2022, and outstanding charting platforms like MT4, MT5, cTrader, and FxPro Edge."
Pros
- FxPro uses a 'No Dealing Desk' (NDD) model for swift and transparent order execution, usually within 12 milliseconds, making it well-suited for short-term trading strategies.
- FxPro's Wallet is a notable feature enabling traders to securely manage their funds. It ensures additional protection and ease by separating unused funds from active trading accounts.
- FxPro provides four dependable charting platforms, including the user-friendly FxPro Edge. It features more than 50 indicators, 7 types of charts, and 15 different timeframes.
Cons
- FxPro offers customer support five days a week around the clock, accessible via various platforms, and the service quality is reliable based on tests. However, the absence of weekend support can be a drawback for traders requiring help beyond standard market times.
- There are no passive investment options such as copy trading or interest on cash. While traders might not find these essential, competitors like eToro, which accommodate both active and passive investors, offer more extensive services.
- FxPro, with its $10M funded demo account and expanding Knowledge Hub, mainly caters to experienced traders. Beginners might find its account and fee structure challenging to understand.
Our Take On IG Index
"IG offers a complete package with an intuitive online platform, top-tier beginner education, advanced charting tools through its TradingView integration, real-time data, and swift execution for seasoned traders."
Pros
- The web-based platform supports traders at every level, offering advanced charting tools and real-time market data vital for trading. Additionally, IG now includes TradingView integration.
- IG provides a wide range of professional and engaging educational materials, such as webinars, articles, and analyses, tailored for traders.
- The IG app provides an excellent mobile trading experience with an intuitive design, earning it the Runner Up position in our 'Best Trading App' award.
Cons
- IG imposes a monthly inactivity fee of $12 after two years, discouraging occasional traders.
- Beginners may find IG's fees complicated, as they vary depending on the trades or services. This could cause confusion and unexpected costs.
- Based on tests, stock and CFD spreads remain less competitive than the lowest-cost brokers, such as CMC Markets.
Our Take On eToro
"eToro's social trading platform excels with its outstanding user experience and lively community chat, aiding beginners in spotting opportunities. It offers competitive fees on numerous CFDs and real stocks, alongside exceptional rewards for seasoned strategists."
Pros
- In 2025, eToro enhanced its trading experience by incorporating insights from over 10 million Stocktwits users, enabling better assessment of market sentiment.
- Leading traders participating in the broker's Popular Investor Programme can earn yearly compensation of up to 1.5% of the copied assets.
- There is an extensive online training academy offering a range of accessible resources, from concise articles to detailed courses.
Cons
- The absence of extra charting platforms such as MT4 may deter experienced traders who rely on external software.
- The only significant contact option, besides the in-platform live chat, is limited.
- The minimum withdrawal is set at $30, accompanied by a $5 fee. This may impact traders with limited funds, particularly those just starting out.
Our Take On Eightcap
"Eightcap excels for traders, offering diverse charting platforms, educational Labs, and AI tools. With over 120 crypto CFDs, it stands out in crypto trading and has won our 'Best Crypto Broker' award twice consecutively."
Pros
- In 2021, Eightcap enhanced its lineup, now providing an extensive range of cryptocurrency CFDs. It offers crypto/fiat and crypto/crypto pairs, along with crypto indices for comprehensive market exposure.
- Eightcap has excelled in all essential trading areas, surpassing all rivals to clinch our 'Best Overall Broker' award for 2024. It also earned the titles of 'Best Crypto Broker' and 'Best TradingView Broker' for 2025.
- With spreads starting at 0 pips, minimal commission charges, and leverage up to 1:500 for select clients, Eightcap delivers affordable and flexible trading opportunities. These conditions suit various strategies, such as trading and scalping.
Cons
- Despite a helpful array of educational guides and e-books in Labs, Eightcap lags behind IG's extensive resources for aspiring traders. IG boasts a dedicated Academy app and features 18 diverse course categories.
- The demo account is available for 30 days, after which it requires a request for extension. This is less convenient than XM's offering, which provides an unlimited demo mode.
- Despite the growing range of tools available, Eightcap lacks popular industry resources such as Autochartist and Trading Central. These provide advanced charting analytics, live news, and essential market insights for traders focused on short-term strategies.
Our Take On Vantage FX
"Vantage is an ideal choice for CFD traders looking for a well-regulated broker with access to the dependable MetaTrader platforms. With a swift sign-up process and a minimum deposit of $50, starting trading is simple and fast."
Pros
- Hedging and scalping strategies are fully permitted without any short-term restrictions.
- Vantage addresses the needs of passive investors through user-friendly social trading on ZuluTrade and Myfxbook.
- With a minimal deposit requirement of just $50 and no funding fees, this broker stands out as an excellent option for novice traders.
Cons
- Regrettably, cryptocurrencies are accessible solely to clients in Australia.
- It's unfortunate that some clients must register with the offshore firm, which provides reduced regulatory safeguards.
- To access optimal trading conditions, a substantial deposit of $10,000 is required. This includes a commission of $1.50 per transaction per side.
Our Take On City Index
"City Index suits active traders perfectly, offering rapid execution speeds averaging 20ms and a customisable web platform with over 90 technical indicators. Its educational resources are exceptional. For UK traders interested in spread betting on 8,500+ instruments tax-free, City Index is an excellent option."
Pros
- City Index offers access to over 13,500 markets, including forex, indices, shares, commodities, bonds, ETFs, and interest rates. The platform's inclusion of niche markets such as interest rates provides traders with unique opportunities not commonly available on other platforms.
- City Index has significantly improved the trading experience. In 2024, they introduced Performance Analytics, providing insights into trades and discipline. The revamped mobile app now includes integrated market research and swipe-access news.
- City Index offers adaptable trading platforms suited to every expertise level. For newcomers, the Web Trader platform is straightforward and user-friendly. For more in-depth analysis and automated features, MetaTrader 4 (MT4) and TradingView are supported, providing a comprehensive trading experience for all traders.
Cons
- Unlike brokers like AvaTrade and BlackBull, City Index lacks options for passive trading, such as social copy trading or real ownership of stocks and ETFs. This limitation may reduce its appeal to traders seeking a more hands-off approach.
- Although many brokers, such as eToro, have broadened their crypto offerings, City Index restricts its clients to crypto CFDs. This limited selection may not meet the needs of traders seeking a wider variety of altcoins.
- City Index does not offer an Islamic account with swap-free conditions, making it less attractive to Muslim traders than brokers such as Eightcap and Pepperstone.
What Does The US Dollar Index Represent?
The US dollar index is a live measure of the US dollar relative to a basket of other major currencies, including the British pound, euro, Japanese yen, Canadian dollar, Swedish krona, and Swiss franc.
The index is computed using a weighted average of exchange rates between the US dollar and these other currencies.
It was first introduced in 1973 by the New York Board of Trade and measures the strength or weakness of the US dollar in global currency markets.
The US dollar index is also sometimes referred to as USDX or DXY, which is its ticker symbol on trading platforms.
How Does The US Dollar Index Work?
The US dollar index is calculated using a weighted geometric mean of the exchange rates between the US dollar and six major currencies. The weightings are based on the relative importance of each currency in US trade.
The index measures the value of the US dollar against a basket of currencies, rather than against any single currency because it’s a more accurate and stable measure of the currency’s value. This means fluctuations in the value of one currency may be offset by movements in the other currencies in the basket. This helps to reduce the impact of volatility in any one currency on the overall value of the index.
To calculate the US dollar index, each currency’s exchange rate is first converted into an equivalent percentage value relative to the US dollar. For example, if the exchange rate for the euro is 1.2 dollars, the percentage value would be 83.33 (1 divided by 1.2, multiplied by 100). These percentage values are then multiplied by their respective weightings, and the resulting values are summed up to create the index value.
The US dollar index is calculated in real-time throughout the trading day and is widely used by traders, investors, and policymakers to monitor the strength of the US dollar. A higher index value indicates that the US dollar is stronger relative to the basket of currencies, while a lower one indicates it’s weaker.
Note, brokers may have their own components and respective weightings in the US dollar index, such as CMC Markets below. These will be detailed in the product specifications.
CMC Markets US Dollar Index Components
Background Explained
The US dollar index dates back to 1973 when the US government officially ended the gold standard and allowed the US dollar to float freely. Before this, there was a fixed relationship between the US dollar index and the price of gold.
The New York Board of Trade (now part of the Intercontinental Exchange) introduced the US dollar index in March 1973 and it was set at a base level of 100, calculated using the currencies of the US’s major trading partners at the time.
The composition of the spot index has changed to reflect shifts in global trade patterns. In 1999, the euro was added as a component currency, and in 2000, the Deutsche mark was replaced by the euro as Germany’s official currency. In 2018, the Chinese yuan was added to the index as a sixth currency.
The price of the US dollar index has fluctuated over its history, reflecting changes in global economic conditions and monetary policy. The index reached a peak of 164.72 in February 1985, due to high US interest rates and strong economic growth, and a low of 71.33 in March 2008, at the height of the global financial crisis.
Live Chart
What Moves The US Dollar Index?
- Interest rates: Higher interest rates generally lead to an increase in demand for US dollars. When interest rates in the US rise, it becomes more attractive for foreign investors to hold US dollar-denominated assets such as bonds, stocks, and real estate. The US dollar rises as a result.
- Inflation: Higher inflation can decrease demand for US dollars, as it reduces the purchasing power of the currency. In addition, high inflation rates can lead to concerns about the stability of the economy, which can cause investors to sell off US dollar-denominated assets and seek safer investments in other currencies. This can contribute to a decline in the value of the US dollar. Note, the best brokers show the US dollar index adjusted for inflation.
- Economic growth: Stronger economic growth in the US can lead to an increase in demand for US dollars, as investors seek to invest in growing markets. This increase in demand for US assets can lead to an increase in demand for US dollars, which can cause the value of the US dollar index to appreciate relative to other currencies.
- Geopolitical events: Political or economic instability in other parts of the world can lead to an increase in demand for US dollars as a safe haven currency. In times of geopolitical instability, investors often become more risk-averse and may look to shift their investments to safer assets, such as those denominated in US dollars. This increase in demand for US assets can lead to an increase in demand for US dollars, which can cause the value of the US dollar index to appreciate.
- Trade balances: A trade deficit can put downward pressure on the US dollar, as it suggests a greater supply of US dollars in global currency markets. As a result, the value of the US dollar index may decline.
- Central bank policy: Actions taken by the Federal Reserve, such as changes in interest rates or the implementation of quantitative easing, can have a significant impact on the value of the US dollar index.
Trading The US Dollar Index
The US dollar index can be traded through various vehicles at the top brokers, including CFDs, futures, options, and ETFs.
To start trading the US dollar index at online brokers:
- Choose a broker: You will need to find a trading broker that allows you to trade the US dollar index. Among the most popular US dollar index brokers in the UK is Pepperstone, an FCA-regulated firm that offers average spreads of 6 pips on the USDX alongside 1:5 leverage.
- Analyse market conditions: Before making a trade, analyse current market conditions and any factors that may impact the price of the US dollar index, such as tracking economic indicators, monitoring central bank policy, or assessing geopolitical events. The top US dollar index brokers offer interactive daily, weekly, monthly and long-term 20+ years charts with historical data and news streams that provide insights to help with forecasts and predictions today.
- Place a trade: The top US dollar index brokers offer trading from charts and graphs on popular platforms like MetaTrader 4. Traders can set stop loss and take profit orders to limit their risk exposure.
Note, the US dollar index is not regulated in the same way as individual stocks or other securities. However, futures contracts that are used to trade the US dollar index are regulated by the Commodity Futures Trading Commission (CFTC) in the United States. The CFTC is responsible for regulating the futures and options markets, including setting rules designed to protect investors and maintain the integrity of the markets and its prices.
UK traders should also sign up with FCA-regulated brokers for additional peace of mind. This should mean sensible restrictions on retail leverage, negative balance protection, plus access to compensation should the brokerage go bankrupt.
Benefits Of US Dollar Index Trading
Pros of investing through US dollar index brokers include:
- Liquidity: The US dollar index is widely traded and highly liquid, meaning that it can be bought and sold quickly and easily, and at a relatively low cost.
- Transparency: The US dollar index is calculated and published in real-time, making it easy for investors to monitor and analyse market trends.
- Accessible: Trading the US dollar index can be done through various financial instruments, including CFDs, ETFs, futures, and options, making it accessible to a range of UK investors.
- Diversification: The US dollar index provides exposure to a basket of currencies, which can help diversify investment portfolios.
- Trading hours: Retail investors can speculate on the US dollar index throughout the standard week at the best brokers. CMC Markets, for example, offers US dollar index trading from 00:00 – 22:00 GMT, Monday to Friday. The USDX can also be traded through futures contracts on the Intercontinental Exchange (ICE) exchange. The trading hours for the US dollar index futures symbol on ICE are Sunday: 6:00 PM ET to 5:00 PM ET Monday, Monday – Thursday: 6:00 PM ET to 5:00 PM ET the following day, Friday: 6:00 PM ET to 5:00 PM ET Sunday.
Risks Of US Dollar Index Trading
Cons of online trading at US dollar index brokers include:
- High volatility: The US dollar index can be highly volatile to economic or geopolitical events, leading to unexpected price movements.
- Technical analysis challenges: Using past market data to predict future price movements can be challenging with the US dollar index due to the complex nature of the basket of currencies it tracks.
- Economic factors: The US dollar index is heavily influenced by economic factors, such as interest rates and inflation, which can be difficult to predict and analyse accurately.
- Geopolitical risks: Political or geopolitical events impact the US dollar index, making it difficult to anticipate and respond to sudden changes in the market.
- Margin requirements: Trading the US dollar index through derivatives often require traders to post margin, which can increase the risk of large losses.
Bottom Line On The US Dollar Index
The US dollar index is widely followed and is often used as a benchmark for measuring the strength of the US dollar. Traders should consider their financial goals and risk tolerance before investing, and stay informed of economic and geopolitical events that could impact the value of the USDX.
See our list of top-rated US dollar index brokers to start trading.
FAQ
What Does The US Dollar Index Mean?
The US dollar index measures the value of the US dollar relative to a basket of six other major currencies: the euro, Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc. When it rises, the US dollar is increasing in value vs the other currencies, while the opposite is true if its value falls.
How Is The US Dollar Index Calculated?
The US dollar index is calculated as a weighted geometric average of the exchange rates between the US dollar and the other currencies in the basket, with each currency assigned a specific weight based on its importance in international trade. The euro has the greatest weighting given its role as a key trading partner.
What Factors Influence The US Dollar Index?
The US dollar index is influenced by a variety of economic and political, including interest rates, inflation, trade balances, government policies, and global events such as natural disasters. Geopolitical uncertainty in Europe, for example, may weaken the value of the euro which in turn would strengthen the US dollar index.
See our guide to understanding the US dollar index for definitions explained, daily currency index charts, historical prices, factors affecting the USDX, latest bullish updates, and more.
How Can You Trade The US Dollar Index?
Investors can trade the US dollar index through various financial instruments, including buying and selling CFDs, ETFs, futures, options, and mutual funds.
For instance, investors could short the US dollar index through inverse ETFs with 2x or 3x leverage. Alternatively, some of best UK brokers with access to the US dollar index, such as Pepperstone, offer CFDs on the instrument with spreads from 6 pips and a minimum contract size of 100.
Why Is The Dollar Index Important?
The US dollar index enables traders to monitor the value of the USD against the currencies of major trading partners. It also provides an opportunity to hedge against risks associated with the dollar through futures, for instance.
How Much Is The Dollar Index Today?
See the live chart in our guide for the US dollar index latest prices and quotes today.
Why Is The US Dollar Index Rising?
The US dollar index may start rising or falling for a variety of reasons. If an event strengthens the value of the US dollar relative to other currencies in its basket then the index may rise. In contrast, if the value of a component currency, such as the Japanese yen, rises then it may have a negative impact on the index.