What is the dollar index (DXY)? How it works, at a 19-month high near 103.4
The dollar index, known by its ticker DXY, measures the US dollar’s value against a basket of six major currencies. When it rises the dollar is strengthening against those currencies, and it closed Friday 13 November 2026 near 103.4, its highest level since April 2025, according to Yahoo Finance data.
That makes it a good time to understand the index. It is one of the most-watched numbers in forex, and it helps explain why EUR/USD, gold, bitcoin and emerging-market currencies such as the rand often move together. This guide covers what the DXY is, how it is calculated, what drives it, and how traders use it.
What is the dollar index (DXY)?
The US Dollar Index tracks the dollar against six currencies: the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc. It started at a base value of 100 in March 1973, shortly after the end of the Bretton Woods system of fixed exchange rates, and it is now maintained by Intercontinental Exchange (ICE), according to the Forex.com guide and the index’s published methodology summary.
A reading of 103.4 means the dollar is about 3.4% stronger against that basket than it was in March 1973. A reading below 100 would mean it is weaker than at the start.
Which currencies are in the dollar index and how are they weighted?
The weights are fixed, and the only change since 1973 came in 1999, when the euro replaced several European currencies. The current weights are:
- Euro: 57.6%
- Japanese yen: 13.6%
- British pound: 11.9%
- Canadian dollar: 9.1%
- Swedish krona: 4.2%
- Swiss franc: 3.6%
The euro makes up more than half of the index, so the DXY moves almost as a mirror image of EUR/USD. When the euro falls against the dollar, the DXY usually rises. The basket also has gaps. China’s yuan, Mexico’s peso and the South African rand are not included, even though they are large trading partners or widely traded currencies. That is why the DXY is a guide to the dollar’s strength against developed-market currencies, not a full measure of its trade-weighted value.
What moves the dollar index?
The biggest driver is interest-rate expectations. Higher US rates, or the expectation of them, make dollar assets more attractive, which supports the currency. That is what is happening now. After a hotter-than-expected October US inflation report, CME FedWatch put the chance of a December Fed hike at about 88%, Yahoo Finance reported. Fed Governor Christopher Waller said a half-point move should be considered if core inflation ran hot, according to CNBC.
Other drivers include:
- Bond yields: FXStreet noted the 10-year Treasury yield moving back above 5% as a key support for the DXY this week.
- Safe-haven demand: In times of geopolitical stress, investors often buy dollars. FXStreet also cited US-Iran tensions as a source of support.
- Other central banks: Because the euro and yen dominate the basket, decisions by the European Central Bank and the Bank of Japan move the index as much as the Fed does.
- Economic data: US jobs, inflation and retail sales figures change rate expectations, so they often move the DXY within minutes.
How do traders use the dollar index?
Most retail traders do not trade the DXY directly. They use it as a guide for the pairs they do trade:
- Confirmation: If the DXY is rising, a falling EUR/USD or GBP/USD is part of a broad dollar move rather than a story about one currency.
- Gold and crypto: Gold is priced in dollars, so a stronger dollar often weighs on it. Our gold price report and the bitcoin update show that link this month.
- Emerging-market currencies: The rand is not in the index, but it often weakens when the DXY climbs. That pattern was visible as the rand hit a seven-month low near R17.
- Yen risk: With USD/JPY around 160, a strong DXY raises the chance of intervention by Japan, which can cause sharp reversals.
What are WiseProp Trader users trading while the dollar climbs?
Trades placed on WiseProp Trader over the seven days to 14 November show EUR/USD as the most-traded pair, with 1,275 trades from 72 traders. Those trades were fairly balanced: 663 buys and 612 sells. That suggests users were split on whether the euro’s slide has further to go. GBP/USD drew 154 trades from 24 traders, with 87 buys and 67 sells.
USD/JPY was the most one-sided major: 79 of its 119 trades, placed by 14 traders, were buys, so traders were mostly backing the dollar against the yen. That is a small sample. These figures show how WPT users are positioned and do not forecast prices.
What should you watch next for the dollar?
The coming week includes US retail sales on Tuesday and the minutes of the Fed’s last meeting on Wednesday. Both could shift December rate expectations. The full schedule is in our week-ahead preview covering Nvidia, the Anthropic IPO and the SARB. If you are new to currency trading, start with our guide to pips and lot sizes. More explainers are in our Guides section.
Dollar index FAQ
Is a high dollar index good or bad?
Neither. A strong dollar makes imports cheaper for Americans and helps foreigners holding dollar assets. It also makes US exports less competitive, cuts the dollar value of US companies’ overseas earnings, and puts pressure on countries with dollar-denominated debt.
Why is the dollar index at a 19-month high?
Mainly because markets expect the Fed to raise rates in December after a hot October inflation report, with US yields above 5%. Geopolitical tension has added safe-haven demand.
Does the rand appear in the dollar index?
No. The DXY covers only the euro, yen, pound, Canadian dollar, Swedish krona and Swiss franc. The rand often moves in the opposite direction to the DXY, but it is driven by its own factors too, including SARB policy and commodity prices.
Can you trade the dollar index?
Yes. Dollar index futures are listed on ICE, and many brokers offer DXY contracts for difference or exchange-traded funds that track it. Most forex traders, though, use the index as a guide and trade the individual pairs instead.
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This article is for education and information only and is not financial advice. Figures are as reported by the sources linked above.
