US Dollar Index 100 Baseline Interpretation Guide
If the US Dollar Index is above 100 today, does that mean the dollar has recently risen or buys more in the United States? Not necessarily: 100 represents the dollar’s relative level against six currencies in March 1973, not a normal exchange rate or measure of purchasing power. This distinction matters when you compare DXY with the USD/KRW exchange rate. The Korean won is not included in the index, so the two indicators can move in different directions. What the baseline and currency weights reveal The index combines the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc. It uses a weighted geometric calculation rather than adding six percentage changes. The euro has a 57.6% weight, followed by the yen at 13.6%, pound at 11.9%, Canadian dollar at 9.1%, krona at 4.2% and franc at 3.6%. An index above 100 means the dollar is stronger against that basket than at the March 1973 baseline; below 100 means it is weaker. That level says nothing by itself...