The US Dollar Index, is a simple measure of the dollar strength against six major currencies.
They are the Euro, Great Britain Pound, Japanese Yen, Canadian Dollar, Swedish Krona and Swiss Franc.
It started in March 1973 at a base rate of 100.
Currently, it is around 80, which means it has fallen relatively 20% in value from 1973.
I use this information as a quick health snapshot of the USD before considering trade decisions.
From the chart below, you can see that the index is ranging around 80 and likewise, the EUR/USD has been ranging these days too.
It may not be a 100% correlation but i feel it does help in a way or another.
I view the US Dollar Index value from Bloomberg.
Do join our free mailing list for exclusive updates!