The USDX (US Dollar Index ICE) is the U.S. dollar index which determines an average geometric value of the dollar’s purchase power compared to six currencies. This index includes the euro, the Japanese yen, the British pound, the Canadian dollar, the Swedish krona and the Swiss franc.
Countries of issue of these currencies are the main trading partners of the USA. Thus, the USDX represents 21 countries which makes the index an appropriate tool for measuring the global power of the U. S. dollar.
The U.S. dollar index was firstly calculated in March 1973 shortly after the reneging of the Bretton Woods System. At that time, the USDX index value was 100,000, since then it rose to 160. Over its history the lowest value was hit on March 16, 2008 and came at 70,698.
The index is updated 24 hours a day during the week except Saturday and Sunday. The significance and popularity of this index can be compared to such indices as Dow Jones, S&P 500, Nikkei-225, FTSE and DAX. The U.S. dollar index trades on the ICE Futures US as well as on Forex.
This index is one of the important financial tools on Forex allowing market participants to execute trading operations and to forecast other currency pairs’ rates. Widely admitted, the USDX is a publicly-traded currency index. Thus, the necessity of this index formation was caused by the creation of a flexible system of floating rates. Like a barometer, the U.S. dollar index characterizes a state of the U. S. national currency in the world.