Definition. An index measuring the value of the US dollar against a basket of six major currencies, in which the euro has the largest weight.
How it works
A rising DXY means the dollar is strengthening. A strong dollar can reduce US companies' foreign revenues once converted and tighten financial conditions.
Example
After inflation data comes in above expectations, the dollar and bond yields rise and stock indices fall.
What to watch out for
The relationship between the dollar and stocks isn't constant; it changes over time.
You'll find the full explanation with graphics, examples and exercises in the 🖥️ Order flow atlas space, and its use in the live market in the 🔴 Live Room. Both are available to Club members (in Polish).
