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The DXY (often called "Dixie") measures the value of the US dollar against a basket of 6 major currencies. It was created in 1973 by the Federal Reserve and is currently maintained by ICE (Intercontinental Exchange).
#### 1. The Currency Basket & Fixed Weights (set in 1973 and only adjusted once)
| Currency | Symbol | Weight in DXY (%) | Notes |
|----------------|--------|-------------------|----------------|
| Euro | EUR | 57.6% | Largest weight (replaced several legacy currencies after € launch) |
| 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% |
These weights have remained virtually unchanged since March 1999 (when the euro replaced Deutsche Mark, French Franc, Italian Lira, Dutch Guilder, and Belgian Franc).
#### 2. The Exact Mathematical Formula
DXY is a geometric weighted average (not arithmetic), calculated as:
\[
\text{DXY} = 50.14348112
\times \left( \text{EUR/USD} \right)^{-0.576}
\times \left( \text{USD/JPY} \right)^{0.136}
\times \left( \text{GBP/USD} \right)^{-0.119}
\times \left( \text{USD/CAD} \right)^{0.091}
\times \left( \text{USD/SEK} \right)^{0.042}
\times \left( \text{USD/CHF} \right)^{0.036}
\]
Key points:
- The base value in March 1973 was set to 100.00.
- The constant 50.14348112 is a scaling factor so that the index started at exactly 100 in 1973.
- Currencies quoted as “XXX/USD” (EUR/USD, GBP/USD) have negative exponents → when the dollar strengthens, these pairs fall → index rises.
- Currencies quoted as “USD/XXX” (USD/JPY, USD/CAD, etc.) have positive exponents → when the dollar strengthens, these pairs rise → index rises.
#### 3. Simple Example (as of Nov 18, 2025, approximate rates)
| Pair | Rate |
|------------|------------|
| EUR/USD | 1.0820 |
| USD/JPY | 154.30 |
| GBP/USD | 1.2940 |
| USD/CAD | 1.3950 |
| USD/SEK | 10.620 |
| USD/CHF | 0.8720 |
Plugging into the formula gives ≈ 99.60, which matches the real-time value you see on trading platforms today.
#### 4. Why Geometric Instead of Arithmetic?
Geometric weighting prevents a single volatile currency from dominating the index and better reflects compounded exchange-rate changes over time (the same method used for many stock indices).
#### Quick Facts
- All-time high: 164.72 (Feb 1985)
- All-time low: 70.698 (Mar 2008)
- Current level (Nov 18, 2025): ~99.60
That’s it — a fixed-weight, geometrically averaged index that has been the global benchmark for dollar strength for over 50 years!