US Dollar Index Futures CFD

The US Dollar Index (USDX) is a widely recognised financial indicator that measures the value of the United States dollar (USD) against a basket of other major currencies. It is often referred to as DXY, which is the ticker symbol used in financial trading markets.

The DXY index includes:

• Euro (EUR): 57.6%
• Japanese yen (JPY): 13.6%
• British pound (GBP): 11.9%
• Canadian dollar (CAD): 9.1%
• Swedish krona (SEK): 4.2%
• Swiss franc (CHF): 3.6%

If the index rises, the US dollar is strengthening against the basket overall. If it falls, the dollar is weakening.

The index was introduced in 1973 following the move away from the Bretton Woods fixed exchange-rate system. Its composition changed when the euro was introduced in 1999, but it continues to use a fixed-weight basket.

A US Dollar Index Futures CFD lets you trade movements in US Dollar Index futures without buying an exchange-traded futures contract directly.

With Axi, the instrument is available as USDINDEX.fs. You can open a long position if you expect the dollar index to rise or a short position if you expect it to fall.

The CFD is traded using margin, so you only need to put up a portion of the position's full value. Leverage increases your market exposure and can magnify both profits and losses.

Because USDINDEX.fs is a futures-based CFD, its pricing is linked to the underlying futures market. When the underlying futures contract reaches expiry, an open position may be rolled into the next contract and a rollover adjustment applied.

The US Dollar Index was introduced in 1973 to provide a benchmark for the dollar's value against a group of major currencies.

Exchange-traded futures on the index were introduced in 1985 and are now traded through ICE Futures U.S.

Over time, the index has moved through periods of significant dollar strength and weakness as interest rates, inflation, economic growth and global market conditions have changed.

Because the basket has a fixed composition and a large weighting towards European currencies, DXY should not be viewed as a measure of the dollar against every major US trading partner.

Past performance is not a reliable indicator of future results.

The US Dollar Index is mainly influenced by changes in the relative strength of the US economy and monetary policy compared with the economies represented in its currency basket.

Key factors include:

• Federal Reserve policy: Interest-rate decisions and expectations for future Fed policy can have a major effect on demand for the US dollar.
• US inflation: CPI and PCE inflation data can change expectations for interest rates and influence DXY.
• US employment and growth: Nonfarm Payrolls, GDP, retail sales and business activity can affect expectations for the US economy.
• US Treasury yields: Rising or falling yields can change the relative attractiveness of US-dollar assets.
• ECB and other central banks: Monetary-policy changes from the ECB, Bank of Japan, Bank of England and other central banks represented in the basket can affect the index.
• EUR/USD movements: The euro has the largest weighting in the index, so changes in EUR/USD can have a particularly strong impact.
• Global market sentiment: Demand for the US dollar can increase or decrease as investors respond to changes in global risk and financial conditions.
• Geopolitical developments: Trade disputes, conflicts and political uncertainty can increase volatility in the dollar and its component currencies

Traders following USDINDEX.fs often monitor Federal Reserve decisions, US CPI and PCE inflation, Nonfarm Payrolls, GDP, Treasury yields and major economic releases.

It is also useful to follow ECB, Bank of Japan and Bank of England policy, along with movements in EUR/USD and USD/JPY.

Because USDINDEX.fs is a futures-based CFD, traders should also be aware of upcoming futures contract rollover dates and any resulting price adjustments.