I recently listened to a podcast that mentioned the USDX, the US Dollar Index. What is it? Do you know what it is?
The US Dollar Index (USDX), also known as the DXY index, is a measure of the value of the US dollar relative to a basket of foreign currencies. The index was created in 1973 by the US Federal Reserve to track the performance of the US dollar against major currencies, including the euro, Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc.
Did you just read that? It takes the US dollar's value and compares it with the value of six other currencies. The stronger (the higher) it gets, the more you will get of the other six currencies as you exchange your USD. If the chart gets weak, it means that the foreign currencies are getting stronger compared to the USD.
How does this impact the market? I wrote an article yesterday about how the Dollar price and its weakness/strength impact financial markets worldwide. That is really true. If the Dollar is getting weaker, it means that it is cheaper for people to purchase products in USD and it is cheaper to buy USD. But if the USD is strong, then the product that has a price of 5 USD suddenly feels much cheaper than it did before, because the Dollar just got stronger. This will impact what people buy and how much they spend. But I really do recommend that you read my article from yesterday if you want to read more about this.
Now you at least know more about the USDX, or the DXY index. The next time you read about it here on HIVE or in a financial article, or in a podcast like me, then you at least know what it is all about!