U.S. Dollar Index (DXY)

The index launched in March 1973, just after the Bretton Woods system of fixed exchange rates broke down, starting at a base value of 100; today it trades as an ICE futures contract. Its basket has been reweighted only once — in 1999, when the newly created euro absorbed the German mark, French franc, Italian lira, Dutch guilder, and Belgian franc. The weights have been fixed ever since, which is why the euro still dominates at roughly 57.6%.

DXY is an index, not a price. A reading above 100 means the dollar is stronger than its 1973 starting point; below 100 means weaker. Because the basket is so euro-heavy, the index is largely a mirror of EUR/USD — a big move in the euro shifts DXY far more than a swing in the Swiss franc or Swedish krona ever could.

DXY peaked near 164 in early 1985, an era of dollar overvaluation that prompted the G5's Plaza Accord to push the currency back down. It bottomed at an all-time low around 71 in March 2008, on the eve of the global financial crisis. In September 2022 it surged to 114.8 — a two-decade high — as the Fed raised rates faster than the ECB or Bank of Japan, then settled into a roughly 100-108 range through 2024-2025.

Because DXY leaves out China, Korea, Mexico, and every emerging market, it is a weak proxy for real trade exposure. Analysts who need that turn to broader measures: the Bloomberg Dollar Spot Index (BBDXY) folds in the yuan, won, Aussie dollar, and peso; the Fed's Broad Trade-Weighted Dollar Index spans 26 currencies weighted by actual trade; and the Real Effective Exchange Rate (REER) goes further still, adjusting for inflation differences between countries.