Trade-Weighted Dollar (Broad)

DTWEXBGS is the Federal Reserve's Trade-Weighted US Dollar Index, Broad, Goods and Services, daily, 2006=100. It measures the value of the dollar against a basket of 26 trading partner currencies, weighted by bilateral trade in goods and services. Unlike the popular DXY (which is dominated by the euro at ~58% weight), DTWEXBGS is a broader and more economically meaningful gauge of US dollar strength against actual trade partners.

Why it matters: DTWEXBGS is the Fed's preferred dollar index for assessing trade-channel implications of dollar moves. A rising DTWEXBGS makes US exports more expensive globally, compresses S&P 500 EPS by roughly 0.5-0.7% per 10% dollar move (because ~41% of S&P 500 revenue is foreign), tightens emerging-market dollar funding, and pressures commodities. It is a fuller representation of the dollar's macro effect than DXY because it includes the Mexican peso, Chinese renminbi, Korean won, and other major trade partners not in DXY.

DTWEXBGS was at 118.86 in April 2026 (Index 2006=100), elevated relative to its post-2008 average of approximately 105-115 but below the late-2022 peak. DXY was 98.92 on April 29, 2026 (the popular but narrower euro-heavy index). The combination of an elevated trade-weighted dollar plus rising gold prices (gold $4,613 spot) is unusual: historically dollar strength caps gold, but the structural BRICS reserve diversification trade has decoupled the relationship since 2022.

Trump tariffs introduced in 2025-2026 have a complex effect on DTWEXBGS. In theory tariffs raise dollar demand by reducing US imports; in practice they have driven foreign-policy responses (currency depreciation by trading partners, reserve diversification) that have not produced the cleanly stronger dollar tariff supporters predicted. The Fed at 3.50-3.75% with cut expectations is the bearish driver for the dollar; structural policy uncertainty is the bullish driver.

Modern DTWEXBGS range: low of 87 in 2011 (post-GFC dollar weakness, EUR/USD near $1.50), 128 peak in late 2022 (DXY 114, post-hiking-cycle). The 2014-2015 dollar surge (DTWEXBGS +14.3% June 2014 to January 2015) coincided with WTI -59% and gold -8%, the canonical "strong dollar squeezes commodities" episode. The drivers are Fed-vs-other-central-bank rate differentials, growth differentials, and capital flow direction (safe-haven flows lift the dollar, risk-on flows weaken it).

First, Fed vs ECB and Fed vs BoJ policy spreads. The 300+bp Fed-BoJ differential is the largest single driver of broad-dollar elevation versus Asian currencies.

Second, EM central bank intervention. Elevated DTWEXBGS often forces EM tightening or FX intervention; the cumulative effect modulates the dollar's broad index.

Third, Treasury and Fed Refunding Announcements. Foreign demand for Treasuries is a key dollar bid; weak demand at coupon auctions historically softens DTWEXBGS by 1-3% over 1-2 months.