Reading the dollar index (DXY) as a forex trader: what each pair inherits

Updated November 2026

The dollar index, or DXY, measures the US dollar against six other currencies, and the euro alone makes up 57.6% of it. So what is DXY in forex? Mostly a mirror image of EUR/USD, with five smaller currencies attached. The table below shows what each major pair contributes, and where the index says nothing at all.

On Ouinex, currency pairs are traded as forex CFDs, so you speculate on the exchange rate without owning either currency. CFD trading involves risk of loss. Leverage amplifies both gains and losses, and a move in the dollar can hit several of your pairs at once.

What is DXY in forex?

The DXY, or US Dollar Index, measures the dollar against six currencies. The euro is 57.6% of it, so the index moves mostly as an upside-down EUR/USD.

The index belongs to ICE Futures U.S., which compiles, weights and publishes it. The US Federal Reserve first developed it in 1973, and ICE has run it since futures on the index began trading in 1985. Its base level is 100.00, set in March 1973, the month the major trading nations let their currencies float freely against each other.

So a reading of 105 means the dollar is about 5% stronger against the basket than in March 1973.

ICE recalculates the index every second, from the mid-point between the latest bid and offer in each of the six exchange rates. If the word "index" itself needs unpacking, see what an index is.

How the DXY is calculated: six currencies, fixed weights

The DXY is a geometrically averaged calculation of six currencies weighted against the dollar. ICE publishes the formula:

DXY = 50.14348112 × EURUSD-0.576 × USDJPY0.136 × GBPUSD-0.119 × USDCAD0.091 × USDSEK0.042 × USDCHF0.036

Each exponent is that currency's weight. It is negative where the dollar is the second currency in the quote, as in EUR/USD and GBP/USD, because a rise in those pairs means a weaker dollar. The constant scales the result so that the index started at 100.

Weights: ICE FX Indexes methodology. They add up to 100%.

Why the weights are dated

The six currencies belong to the top six US trading partners as measured in 1973. The index has been adjusted once. In January 1999 the euro replaced five of the original ten currencies: the German mark, French franc, Italian lira, Dutch guilder and Belgian franc. Their combined weight stayed at 57.6%, and there are no regularly scheduled rebalancings.

So the weights describe the dollar's trade of the early 1970s, not today's. Mexico and China, which carry 14.8% and 10.9% of the Federal Reserve's 2026 trade weights, have no place in the DXY at all.

What each currency pair inherits from the DXY

Because the index is a weighted geometric average, a 1% move in one pair, with the other five unchanged, moves the DXY by roughly that currency's weight. That is arithmetic from the formula, not a forecast.

Sensitivities calculated from the ICE formula above, rounded to two decimal places.

The worked line is simple. If EUR/USD falls 1% and every other pair stays put, the DXY rises by about 0.58%.

That is why the DXY's correlation with EUR/USD looks so strong: the near mirror image is built into the 57.6% weight, not discovered in the data. If the dollar gains 1% against all six currencies at once, the DXY rises by about 1%. Only a move shared across the basket shows up in full. For how each pair is quoted, see the major currency pairs.

Where the DXY misleads a forex trader

• It is euro-heavy. A rising DXY often means a falling euro, not a broadly stronger dollar.
• Whole currencies are missing. The Australian and New Zealand dollars, the Chinese yuan, the Mexican peso and the Indian rupee have no weight in the DXY. The Federal Reserve's broad index includes all of them except the New Zealand dollar, with 26 currencies in its 2026 weights.
• The weights are old. The DXY gives the euro 57.6% and the Swedish krona 4.2%. The Federal Reserve's 2026 trade weights give the euro area about 21.0% and Sweden about 0.6%. The Fed's index changes its weights each year; the DXY does not.
• Spot index or futures price? The two differ: according to ICE, futures prices reflect interest-rate differentials between each currency and the dollar. A quote labelled "dollar index" may be either, so check before comparing it with a spot pair.
• The gold relationship is not stable. Gold is priced in dollars, and the two have often moved in opposite directions, but not always. The World Gold Council found a consistently negative correlation between gold and the dollar in weekly returns from January 1971 to March 2018. A correlation is an average over many weeks. It says nothing certain about any single one.

Reading the DXY next to a trade

The DXY answers one narrow question well: is this move about the dollar, or about the other currency? A simple reading habit uses the table above.

1. Note both moves over the same period: the pair's percentage change and the DXY's.
2. Compare them with the pair's weight. A pair moving on its own moves the DXY by roughly its share of the basket, and no more.
3. Check the calendar. Note scheduled US data, such as the Consumer Price Index (CPI) release, so a dollar-wide move can be matched to the event around it.

Two illustrative cases, with made-up moves:

• USD/JPY rises 1.5% in a session and the other five rates barely move. The DXY rises only about 0.20%. That is not a strong-dollar day: the move is mostly about the yen.
• EUR/USD, GBP/USD and USD/JPY each move about 0.6% in the dollar's favour, and the DXY rises about 0.6%. The move is spread across the basket, so it is dollar-wide.

Neither case is an entry or exit rule. The DXY describes what has already happened to the dollar; it does not say what a pair will do next. For the wider picture of how rates and releases feed into exchange rates, see how rates and economic data move currencies.

FAQ: the dollar index, answered

What does DXY stand for?

DXY is the code for the ICE U.S. Dollar Index, also called the USDX. ICE's own methodology uses DXY as the index's short name, while its exchange symbol is DX. Whichever code a chart shows, it is the same index: the dollar against six currencies, based at 100 in March 1973.

Why does the DXY move opposite to EUR/USD?

The euro is 57.6% of the index, and EUR/USD is quoted with the dollar second. When EUR/USD falls, the dollar has gained against the euro, so the DXY rises. With the other five rates unchanged, a 1% fall in EUR/USD lifts the DXY by about 0.58%. The mirror image is built into the formula.

Does a stronger DXY mean gold falls?

Not necessarily. Gold is priced in dollars, and the two have often moved in opposite directions, but not always. The World Gold Council found a consistently negative correlation in weekly returns from 1971 to March 2018. That is a past average, not a rule. A "stronger DXY" is also, mostly, a weaker euro.

How is the DXY different from a trade-weighted dollar index?

The DXY holds six currencies on weights fixed since 1973, adjusted once for the euro in 1999. The Federal Reserve's broad index covers 26 currencies, including the yuan and the peso, and updates its weights each year; in 2026 it gives the euro area about 21%. The DXY is euro-heavy; the broad index is not.

Conclusion

The DXY is mostly the euro. At 57.6% of the basket, EUR/USD drives most of what the index does, so it adds little to a EUR/USD chart.

For sterling, the yen and the Canadian dollar, it is a useful check on whether a move is dollar-wide or local. For the Australian dollar, the yuan and the peso, it says nothing directly; the Federal Reserve's broad index is the better reference.

Read the DXY to tell a dollar move from a currency move. Do not read it as a signal. Trading forex CFDs involves risk of loss, and leverage amplifies both gains and losses.

Zero commission on forex, stock indices and commodities: you pay the spread. See forex CFD pricing on Ouinex.

Sources

1. ICE Data Indices: ICE FX Indexes (DXY, ICELX, ICEEX, ICEJX) methodology, version 3.0, valid from 2 April 2018: weights, constant, base level 100.00, base date March 1973, the six 1973 trading partners, the DXY code
2. ICE Futures U.S.: U.S. Dollar Index Contracts FAQ (June 2015): formula, history (Federal Reserve 1973, futures 1985), the 1999 euro change, no scheduled rebalancing, futures prices and interest-rate differentials, the DX symbol
3. ICE: U.S. Dollar Index (USDX) page: geometric average, calculation every second from bid-offer mid-points
4. ICE Futures U.S.: U.S. Dollar Index brochure (undated): weights, the legacy currencies' 57.6% kept fixed, the Federal Reserve index changing its weights annually
5. Federal Reserve: Foreign Exchange Rates, H.10, Currency Weights (trade weights as of 2 February 2026)
6. World Gold Council: Investment Update: Gold tracks the dollar as rates take a back seat (22 April 2018)