The ICE methodology reflects these quote conventions: EUR/USD and GBP/USD enter the formula inversely, while USD/JPY, USD/CAD, USD/SEK and USD/CHF move in the same direction as the dollar.
What DXY does not measure
DXY is not a complete measure of global dollar strength. It does not include the rand, Chinese yuan, Indian rupee, Mexican peso, Brazilian real or Australian dollar.
That matters for South African readers. A rising DXY does not automatically mean USD/ZAR will rise by the same amount — or even move in the same direction. The rand can be influenced by commodity prices, local inflation, fiscal policy, electricity-supply developments and shifts in appetite for emerging-market assets.
For a broader trade-weighted measure, the US Federal Reserve maintains a broad dollar index covering currencies from 26 economies. DXY remains popular in market commentary because it has a long history and is widely traded, but its basket is narrower.
A fixed basket with a long history
DXY was introduced in 1973. Its composition has changed significantly only once: in 1999, when the euro replaced several legacy European currencies, including the Deutsche mark and French franc.
The fixed structure gives the index consistency across decades. It also means DXY does not automatically adjust as global trade patterns or emerging-market currencies become more important. ICE’s USDX materials explain the benchmark’s fixed-composition design.
How traders access DXY and which costs matter
DXY can be followed as a benchmark, traded through exchange-listed futures, or accessed through derivatives such as CFDs. The product differs, but traders normally need to review spread, commission where applicable, overnight financing and execution conditions.
