It’s a composite market index.
It is used to measure the exchange rate against the dollar.
A rise in the dollar index means that the price of the dollar is rising along with other prices. In other words, the world’s major commodities are priced in dollars, and corresponding commodity prices will fall accordingly.
U.S. dollar index futures are traded on ICE and are considered the currency benchmark by traders, analysts and economists around the world.
So you need to know about the dollar index.
First let’s take a look at the currency share of the ICE U.S. Dollar Index, which is above 50%.
Why is that?
The reason is very simple, because there are more than 15 countries in the European Union using the euro, which is the largest, and the euro is considered by some to be the second largest in the world.
Japan, in second place, is one of the world’s largest economies.
In second place is equal currency.
As can be seen from the above, the dollar is closely related to the euro and other currencies, and the trend of the dollar index is basically inversely proportional to the corresponding currencies.
A decline in the dollar index means that the value of the dollar is falling relative to the average of all other currencies (the dollar is weaker), while a rise in the dollar index means that the currency is rising relative to the average of all other currencies.
This index reflects a universal value.
So should we care about this index?
The answer is yes, because the dollar index is very helpful for our long-term analysis of market fundamentals, especially when we focus on the economic cycle.
In addition, the index can be used to look for divergences between related markets.
The strong dollar continued, with U.S. oil plunging nearly 8 percent and the energy crisis threatening to drag the euro below parity.
Please pay attention to the specific operation, the market is changing rapidly, investment needs to be cautious, the operation strategy is for reference only.
