DXY continued to rise significantly and gold prices started to f
The DXY index, also known as the USD index, is a measure of the strength of the U.S. dollar relative to six of the United States' major trading partners, including the euro (EUR), yen, and Japanese yen (JPY). ), British Pound (GBP), Canadian Dollar (CAD), Swedish Krona (SEK), Swiss Franc (CHF).
The USD Index is calculated from the exchange rates of 6 other currencies (together with the parts that make up the USD Index): EUR 57.6%, JPY 13.6%, GBP 11.9%, CAD 9.1%, SEK 4.2%, CHF 3.6%. Therefore, fluctuations in this index depend not only on the US domestic economy, but also on its correlation with major economies around the world.
To understand this better, let's look back a little at history. When the US Federal Reserve began raising interest rates in 1994, the dollar appreciated until 2000 as tech stocks rose. However, the bursting of the dot-com bubble and the September 11, 2001 terrorist attacks ended DXY's bullish momentum and caused the US dollar to plummet. DXY fell to historic lows during the 2008 financial crisis.
The DXY index started rising again from his 2011 year. This is mainly due to two factors. First, in 2011, most economies in southern Europe were in a difficult situation due to over-indebtedness, which led to a weak euro and a strong US dollar. Second, the Fed first talked about tapering its bond purchases in 2013 and began raising interest rates in 2015. In 2016, with the election of Donald Trump as US president, the dollar hit a 13-year high amid confidence that the Federal Reserve would increase spending on roads, bridges and industry, as well as raise interest rates. , investors are optimistic about future growth rates. of the US economy.
The USD Index is calculated from the exchange rates of 6 other currencies (together with the parts that make up the USD Index): EUR 57.6%, JPY 13.6%, GBP 11.9%, CAD 9.1%, SEK 4.2%, CHF 3.6%. Therefore, fluctuations in this index depend not only on the US domestic economy, but also on its correlation with major economies around the world.
To understand this better, let's look back a little at history. When the US Federal Reserve began raising interest rates in 1994, the dollar appreciated until 2000 as tech stocks rose. However, the bursting of the dot-com bubble and the September 11, 2001 terrorist attacks ended DXY's bullish momentum and caused the US dollar to plummet. DXY fell to historic lows during the 2008 financial crisis.
The DXY index started rising again from his 2011 year. This is mainly due to two factors. First, in 2011, most economies in southern Europe were in a difficult situation due to over-indebtedness, which led to a weak euro and a strong US dollar. Second, the Fed first talked about tapering its bond purchases in 2013 and began raising interest rates in 2015. In 2016, with the election of Donald Trump as US president, the dollar hit a 13-year high amid confidence that the Federal Reserve would increase spending on roads, bridges and industry, as well as raise interest rates. , investors are optimistic about future growth rates. of the US economy.
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