US DOLLAR INDEX Forecast and News


US Dollar with some gains ahead of key data

As the week opened, the US Dollar, measured by the DXY index, exhibited a decline towards the 104.30 area and then recovered to 104.40. US President Joe Biden's expected departure from the presidential race has favored former President Donald Trump, and this upheaval has spurred investors to lean towards riskier assets. Complementing this, the expectation of a dovish stance from the Federal Reserve has resulted in an abrupt round of US Dollar selling.

Latest US Dollar Index News

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Latest US Dollar Index Analysis


Latest US Dollar Index Analysis

Editors' picks

EUR/USD inches higher to near 1.0900; next barrier at four-month highs

EUR/USD inches higher to near 1.0900; next barrier at four-month highs

EUR/USD advances for the second consecutive day, trading around 1.0900 during early Tuesday's European session. The analysis of the daily chart shows a weakening of a bullish trend, as the pair is positioned below an ascending channel.

EUR/USD News

GBP/USD bullish potential seems intact while above 1.2900 mark

GBP/USD bullish potential seems intact while above 1.2900 mark

GBP/USD lacks firm intraday direction and oscillates in a narrow range on Tuesday. The fundamental backdrop and the technical setup seem tilted in favor of bulls. A convincing break below the 1.2900 mark is needed to negative the positive bias.

GBP/USD News

USD/JPY extends losses toward 156.00, as risk-off mood returns

USD/JPY extends losses toward 156.00, as risk-off mood returns

USD/JPY accelerates declines toward 156.00 early Tuesday. The Japanese Yen stays bid as risk-off flows return in the Asian session, sustaining the US Dollar weakness-driven downside in the pair. The pair looks to Japanese verbal intervention and mid-tier US data. 

USD/JPY News

Gold's struggle with $2,400 extends amid market caution

Gold's struggle with $2,400 extends amid market caution

Gold price is making another attempt to reclaim $2,400 on a sustained basis, replicating the moves seen during Monday’s Asian trading. Gold price appears to be benefiting from a typical market caution and renewed China’s economic worries and ahead of key US earnings reports.

Gold News

WTI holds below $79.50 amid demand concerns

WTI holds below $79.50 amid demand concerns

West Texas Intermediate, the US crude oil benchmark, is trading around $79.00 on Tuesday. WTI price edges lower to near lowest level in over a month amid oil demand concerns and rising stockpiles. 

Oil News

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Fed News & Analysis

FED News

FED ANALYSIS


DOLLAR INDEX, USDX

The US Dollar Index (USDX) is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies. These currencies are the Euro (constituting 57.6% of the weighting), Japanese Yen (13.6%), British Pound (11.9%), Canadian Dollar (9.1%), Swedish Krona (4.2%) and Swiss Franc (3.6%). The index started in 1973 -with the absolution of Bretton Woods- with a base of 100.000, and values since then are relative to this base. For example, if the current reading says 99.800, this means that the dollar has fallen 0.2% since the start of the index (99.800 - 100.000).
Being the Dollar Index a geometrically weighted index and not a trade-weighted one, it is too concentrated in Europe and does not include two of the U.S. top four trading partners Mexico and China. It does not appear to be used by corporates or many asset managers, like mutual funds, insurance companies, and endowments. It is primarily a speculative vehicle. It's also important to acknowledge that a geometric mean artificially lowers the value of the USD over time.

ORGANIZATIONS, PEOPLE AND ECONOMIC DATA THAT INFLUENCE US DOLLAR INDEX

The US Dollar Index news can be seriously affected by the decisions taken by these organizations and people:

  • Fed, the Federal Reserve of the United States whose president is Jerome Powell. The Fed controls the monetary policy, through active duties such as managing interest rates, setting the reserve requirement, and acting as a lender of last resort to the banking sector during times of bank insolvency or financial crisis.
  • The US Government: events as administration statements, budget, new laws and regulations or fiscal policy can increase or decrease the value of the Dollar Index.
  • The US Treasury Dept that defines its role as “the steward of U.S. economic and financial systems, and as an influential participant in the world economy.”
  • US GDP (Gross Domestic Product), the total market value of all final goods and services produced in the United States of America. It is a gross measure of market activity because it indicates the pace at which a country's economy is growing or decreasing. Generally speaking, a high reading or a better than expected number is seen as positive for the Dollar Index, while a low reading is negative.

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The US Dollar Index

When I write the Online Trading Academy Forex newsletter, I give my opinion about what I believe is happening to the currencies of the world based on the news I hear, the experts I follow, and my personal experiences of the economic cycles I have seen in the past. This fundamental information helps me understand what reports and indicators the economists of the world believe will shape future events.

A Look at the US Dollar Index

Over the last few months especially, there’s been a lot of focus in the world of Currency Trading upon the state of the US Dollar. No matter what your opinion is of the Greenback, it is still, without question, regarded as the world’s primary reserve currency and holds its weight of recognition across the board.