US Dollar Index
Those who are watching business television channels regularly or following on economic news, would have noticed that these days, more and more commentators are talking about US Dollar Index. For better appreciation, let us decipher the subject. What is Dollar index Established in 1973, the US Dollar Index (USDX) is an empirical measure of the value of US dollar against six other foreign currencies (fixed basket of currencies), with assignment of varying weights to respective currencies ie. Euro (EUR) 57.6 %, Japanese Yen (JPY) 13.60%, British Pound (GBP) 11.90%, Canadian Dollar (CAD) 9.10%, Swedish Krona (SEK) 4.20% and Swiss Franc (CHF) 3.60%. Before 1999, when Euro became a legal tender, USDX consisted of ten currencies-Deutsche mark, French franc, Italian lira, Dutch guilder, and Belgium franc in addition to JPY, GBP, CAD, SEK and CHF. To draw an analogy, the value of a stock index like SENSEX or NIFTY is computed on the basis of a basket of ...