FX & Dollardaily

Trade-Weighted Dollar (Broad)

Name: Trade-Weighted Dollar (Broad)
Creator: Convex
License: https://creativecommons.org/licenses/by/4.0/

Broad trade-weighted US dollar index, measures dollar strength vs major trading partners.

118.86

1W -0.17%1M -2.00%3M -2.00%

Updated 2m ago

Updated just now

Current Reading

Dollar in neutral range

AI Analysis

Apr 14, 2026

Gold at $4,865 with CFTC specs at 2nd pctile (maximum mechanical short-cover fuel), sovereign demand as price-insensitive buyer at ATH, stagflation as the optimal macro regime, net liquidity expanding, and DXY breaking down — all five structural pillars remain intact. If wrong and real yields spike above 2.25% + DXY reverses to 121+, drawdown risk is $4,400-4,500 (~8% downside). DXY broad 118.86 (-1.41% 1M, decelerating from prior 2-3%/month pace).

About Trade-Weighted Dollar (Broad)

What Is the DXY?

The US Dollar Index (DXY) measures the value of the US dollar against a basket of six major currencies, the Euro (57.6%), Japanese Yen (13.6%), British Pound (11.9%), Canadian Dollar (9.1%), Swedish Krona (4.2%), and Swiss Franc (3.6%). Created in 1973 after the collapse of Bretton Woods, with a base value of 100, it is the most widely watched gauge of broad dollar strength in global markets.

The DXY matters far beyond currency trading. As the world's reserve currency, the dollar's strength or weakness ripples through every asset class: commodities, emerging markets, US corporate earnings, global liquidity conditions, and central bank policy worldwide. Understanding DXY dynamics is essential for any macro trader, it is the connective tissue that links monetary policy in Washington to bond markets in Tokyo, commodity prices in London, and equity markets in Shanghai.

The DXY Basket

Currency	Weight	Why This Weight
Euro (EUR)	57.6%	Combined weight of former Deutsche Mark, French Franc, Italian Lira, etc.
Japanese Yen (JPY)	13.6%	Japan was the #2 economy when DXY was created
British Pound (GBP)	11.9%	UK was a major trading partner
Canadian Dollar (CAD)	9.1%	Largest US border trading partner
Swedish Krona (SEK)	4.2%	Historical trading importance
Swiss Franc (CHF)	3.6%	Safe-haven and financial center currency

The Missing Currencies

The DXY's biggest limitation: it excludes China, India, Mexico, South Korea, and Brazil, collectively representing a larger share of US trade than the six included currencies. The DXY is essentially a "dollar vs developed-world currencies" index, with a massive euro bias.

For a more comprehensive view:

Fed Broad Trade-Weighted Dollar (DTWEXBGS): 26 currencies, trade-weighted
Bloomberg Dollar Spot Index (BBDXY): 10 currencies, more modern weighting
Real Effective Exchange Rate (REER): Adjusted for inflation differentials

DXY History: The Major Regimes

Period	DXY Range	Regime	Key Driver
1973-1978	100 → 82	Weak dollar	Post-Bretton Woods uncertainty, oil shocks, inflation
1978-1985	82 → 165	Super strong dollar	Volcker rate hikes (20%+ fed funds), capital inflows
1985-1992	165 → 78	Plaza Accord weakness	G5 coordinated intervention to weaken dollar
1995-2002	80 → 120	Strong dollar	Dot-com boom, US growth outperformance
2002-2008	120 → 71	Weak dollar	Fed easing post-dot-com, twin deficits, commodity supercycle
2008-2011	71 → 89 → 73	Volatile	GFC safe-haven (up), then QE (down)
2011-2016	73 → 103	Strengthening	Taper tantrum, ECB negative rates, diverging policy
2017-2021	103 → 89	Mild weakness	COVID stimulus, zero rates, global recovery
2022	95 → 114	Wrecking ball	Fastest Fed hiking cycle in 40 years; 114 was 20-year high
2023-2025	114 → 100-108	Moderating	Rate peak, de-dollarization concerns

Cross-Asset Impact: The Dollar as Global Macro Lever

The DXY Transmission Mechanism

Asset Class	DXY Rises 10%	DXY Falls 10%	Correlation
Gold	Falls 5-15%	Rises 5-15%	-0.4 to -0.6
Crude Oil	Falls 5-10%	Rises 5-10%	-0.3 to -0.5
Copper	Falls 5-12%	Rises 5-12%	-0.3 to -0.5
S&P 500 EPS	Falls 3-5% (translation)	Rises 3-5%	-0.2 to -0.3
EM Equities (EEM)	Falls 10-20%	Rises 10-20%	-0.5 to -0.7
EM Currencies	Weaken 5-15%	Strengthen 5-15%	-0.6 to -0.8
US Treasuries	Mixed (capital inflows vs inflation)	Mixed	Low correlation
Bitcoin	Falls 5-15%	Rises 5-15%	-0.3 to -0.5 (since 2020)

The "Dollar Smile" Theory

Economist Stephen Jen developed the Dollar Smile framework that explains the DXY's non-linear behavior:

Left side of smile (dollar strong): Global risk-off → safe-haven dollar demand
Bottom of smile (dollar weak): Goldilocks growth → capital flows to higher-yielding non-US assets
Right side of smile (dollar strong): US outperformance → capital attracted by superior US growth and yields

The dollar is weakest when the global economy is growing moderately and the US is not dramatically outperforming, the "middle ground" where investors venture into EM, commodities, and foreign equities.

Trading the DXY

The Primary Instruments

Instrument	Ticker	Liquidity	Best For
ICE DX Futures	DXY	Very high	Direct macro DXY trading
EUR/USD (inverse proxy)	EUR/USD	Highest in world ($2T+/day)	Most liquid dollar trade
UUP / UDN ETFs	UUP, UDN	Moderate	Equity-account dollar exposure
Gold (inverse proxy)	GLD, GC	Very high	Dollar weakness + inflation hedge
EM currency ETFs	CEW	Low	Broad EM vs dollar

DXY Trading Playbook

Regime	DXY Trade	Cross-Asset Trade
Fed hiking, DXY rising	Long DXY/UUP	Short gold, short EM, short commodities
Fed peak/pivot	Short DXY/Long UDN	Long gold, long EM, long commodities
Global risk-off	Long DXY (safe haven)	Long Treasuries, short risk assets
US recession	Short DXY (Fed will cut)	Long gold, long duration
De-dollarization catalyst	Short DXY	Long gold, long BTC, long commodity currencies

What to Watch

Fed vs ECB/BOJ rate differential, the most important single driver; when the spread widens in favor of the US, DXY rises
US vs global growth data, PMIs, jobs data, GDP; when US outperforms, DXY strengthens
VIX / risk sentiment, DXY tends to surge during risk-off events (safe-haven demand)
Treasury foreign holdings data (TIC), monthly data on foreign purchases of US assets; declining foreign demand = DXY headwind
Central bank gold purchases, sustained buying signals structural de-dollarization, a long-term DXY headwind

Read full glossary entry →

Recent Data

Date	Value	Change
Apr 10, 2026	118.86	-0.04%
Apr 9, 2026	118.9	-0.13%
Apr 8, 2026	119.06	-1.05%
Apr 7, 2026	120.32	-0.09%
Apr 6, 2026	120.43	-0.19%
Apr 3, 2026	120.66	+0.13%
Apr 2, 2026	120.5	+0.32%
Apr 1, 2026	120.12	-0.76%
Mar 31, 2026	121.04	-0.21%
Mar 30, 2026	121.29	—