The U.S. Dollar Index, commonly referred to as DXY, measures the value of the U.S. dollar relative to a basket of major foreign currencies. The index is heavily weighted toward the euro, with additional exposure to the Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc. A rising DXY indicates a strengthening U.S. dollar, while a declining DXY signals dollar weakness. Because most global commodities—including gold and oil—are priced in dollars, movements in the DXY have a significant impact on inflation expectations, interest rates, and asset prices worldwide.
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