Measuring the strength /weakness of the dollar:
vs. a "basket" of currencies: .DXY (see link here)
trade weighted basket of currencies
A trade-weighted currency index is a weighted average of a basket of currencies that reflects the importance of a country's trade (imports and exports) with these countries. Sometimes a trade-weighted currency index is taken as a crude measure of a country's international "competitiveness". At any rate, a trade-weighted currency index is a useful measure to aggregate diverging trends among currencies of a country's trading partners. For example, Canada is trading mostly with the United States. Thus the USD/CAD exchange rate has a weight of about 80% in Canada's trade-weighted CAD index.
Where else can I find information about trade-weighted exchange rates?
Trade-weighted exchange rates are computed by a number of statistical agencies, governments, and supranational organizations such as the International Monetary Fund. Many of them differ slightly in the way they calculate the trade-weighted indices: which currencies they include in the "basket", which weights they assign, and how these weights are updated over time. A good place to start for the USD is with the time series offered by the St. Louis Federal Reserve Bank in the U.S.
Table of Contents
US Dollar to Euro (showing dollar Depreciation)
External Links
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