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The USD Index

Scorpio

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#1
U.S. Dollar Index
From Wikipedia, the free encyclopedia


US Dollar Index and major financial events.
The US Dollar Index (USDX, DXY) is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies,[1] often referred to as a basket of US trade partners' currencies.[2]

It is a weighted geometric mean of the dollar's value relative to other select currencies:

USDX goes up when the US dollar gains "strength" (value) when compared to other currencies.[3]

USDX started in March 1973, soon after the dismantling of the Bretton Woods system. At its start, the value of the US Dollar Index was 100.000. It has since traded as high as 164.7200 in February 1985, and as low as 70.698 on March 16, 2008.

The make up of the "basket" has been altered only once, when several European currencies were subsumed by the euro at the start of 1999. The make up of the "basket" is overdue for revision as China, Mexico, South Korea and Brazil are major trading partners presently which are not part of the index whereas Sweden and Switzerland are continuing as part of the index.

USDX is updated whenever US Dollar markets are open, which is from Sunday evening New York City local time (early Monday morning Asia time) for 24 hours a day to late Friday afternoon New York City local time.

USDX can be traded as a futures contract on the IntercontinentalExchange (ICE). It is also available in exchange-traded funds (ETFs), options and mutual funds.

https://en.wikipedia.org/wiki/U.S._Dollar_Index
 

Scorpio

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#2
re the commentary on who should and should not be included above:

There is a reason china isn't included in the index, and that is simply because they are pegged to the USD index. Until they float their currency and go full independent, there is zero chance of them being added.

The reasons for the krona and franc to be included vs mexico and brazil should be quite obvious.
 

Scorpio

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#3
What does it mean?

A USD isn't a straight weight against another currency, for instance if the yen increases, the dollar would decrease a equivalent amount. It will move proportionally to what the other currencies are doing in the basket.

If there then is a big move in the Yen to the up, will the USD go down? It depends. If all others are flat in the index, then the move in USD will be tempered.

As a reserve currency, the USD is then offered more stability vs any one currency, in that a large move in one particular country does not have a outsized affect on another economy.
 

Scorpio

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#4
This takes us back to what Pyramid had stated in a post about a large move in a short period of time in the USD in another thread.

A large fast move in the USD index isn't a positive thing. It speaks to a disruption in the force.
 

Scorpio

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#5
attached are recent charts of the flops:

usd.png


euro.png


yen.png


bp.png
 

BarnacleBob

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#6
400px-US_Dollar_Index_from_Stooq_dot_com.png


Noting on the long term $ chart there is a profound head & shoulders technical formation, the left shoulder developed sometime around 1968, the head around 1981, and the right shoulder about 2000.... Not only did a H & S form, additionally a pennant formed off of the 1981 & 2000 tops, signalling future $ weakness.....

It should also be noted that since the 1981 top, the greenback is printing lower highs & lower lows for the past 35 yrs... An ominus trend is in play!

Trade-weighted US dollar index

The trade-weighted US dollar index, also known as the broad index, is a measure of the value of the United States dollarrelative to other world currencies. It is similar to the U.S. Dollar Indexin that its numerical value is determined as a weighted average of the price of various currencies relative to the dollar, but different currencies are used and relative values are weighted differently. The base index value is 100 in March 1973.

https://en.m.wikipedia.org/wiki/Trade-weighted_US_dollar_index

In the standard US dollar index (FOREX), a significant weight is given to the euro. To more accurately reflect the strength of the dollar relative to other world currencies, the Federal Reserve created the trade-weighted US dollar index,[3] which includes a bigger collection of currencies than the US dollar index. The regions included are:

  • Europe (euro countries)
  • Canada
  • Japan
  • Mexico
  • China
  • United Kingdom
  • Taiwan
  • Korea
  • Singapore
  • Hong Kong
  • Malaysia
  • Brazil
  • Switzerland
  • Thailand
  • Philippines
  • Australia
  • Indonesia
  • India
  • Israel
  • Saudi Arabia
  • Russia
  • Sweden
  • Argentina
  • Venezuela
  • Chile
  • Colombia
Fed Reserve $ Trade Weighted Chart (Broad)

https://research.stlouisfed.org/fred2/series/TWEXB

Fed Reserve Trade Weighted Chart: Major Currencies

https://research.stlouisfed.org/fred2/series/DTWEXM
 

solarion

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#7
Meanwhile...outside the fake, phony, and false world of state sponsored monopoly munny propaganda. The real struggle can be clearly seen when measured in real money.



http://pricedingold.com/us-wages/
 

Brio

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#8
Would be interesting to see a chart of taxes measured in gold over the last 100 years.

But the USDX is up and I'm paying $22/oz spot for ag. Grrrr.
 

solarion

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#9
Even using the BLS' nonsensical understated inflation metric an ounce of silver at its all time intraday high($50.35) in 1980 dollars would cost $145.51 today.
 

solarion

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#11
I'm no polar bear, but perhaps this will help.


 

Scorpio

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#12
can you elaborate?
the prior are part of the old guard,

while the others are the exploited,

they want their own opinions, and refuse to drink the koolaid
 

Hystckndle

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#13
This takes us back to what Pyramid had stated in a post about a large move in a short period of time in the USD in another thread.

A large fast move in the USD index isn't a positive thing. It speaks to a disruption in the force.
Connected perhaps also to these somewhat sharp moves in miners etc. JMHO....I.e...its all connected...
Some odd action of late.
Nevertheless...still accumulating. Good stuff.
Regards to all,