Good morning,

today we will have a look at the US Index (DXY): this is a basket of 6 different major currencies against the US$. Specifically, these are EUR, GBP, JPY, CAD, SEK, CHF.

As you can understand, it's a good way to evaluate the general strength of the greenback isolating the noise that can be in a specific cross, finally helping to understand if a trend is derived by the strength of the American currency or by the weakness of the other one.

DXY was created by the FED in 1973, after the Bretton Woods Agreement and the introduction of the new system of free floating currencies. It started trading at 100$; before, USD was anchored to Gold, with an exchange of 35$ / Troy Ounce.

We can see these days, DXY is not trading that far from that starting level. Yesterday its price was fixed at 97.89 and the index is really close to decade highs, indicating a STRONG USD. You can see it started trending higher in 2014 (from 80$ levels...do you remember EUR/USD at 1,40?) touching a max in 2017 at 101$ (yep, EUR/USD falling as low as 1.05, for example).

Stay Safe