The U.S. Dollar is the most used currency in international transactions and as other countries’ official currency. Furthermore, the Dollar is also one of the world’s reserve currencies. Today, the Dollar is the standard unit of currency in many commodity markets, such as gold and oil, all over the world.
|U.S. Dollar Index Contract Specifications|
|Trading Hours||Electronic Trading Hours (Sun – Fri) *The trading platform is available 30 minutes before the opening for order entry.
Open on Sunday night is 5:00 PM CT; Pre-Open at 4:30 PM CT
|Units of Trading||One contract = $1000 X Index value|
|Quotation||US Dollar Index points, calculated to three decimal places .010 = $10|
|Tick Size||.005 = $5|
|Contract Listings||Four months in the March/June/September/December quarterly expiration cycle|
|Price Limit||The DX contract has no price limits|
|Daily Settlement||The volume-weighted average of all electronic trades transacted in the closing session (14:59 to 15:00 Eastern time).|
|Last Trading Day||Trading ceases at 10:16 Eastern time two days prior to settlement (see next entry).|
|Final Settlement||The US Dollar Index is physically settled on the third Wednesday of the expiration month against six component currencies (euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc) in their respective percentage weights in the Index. Settlement rates may be quoted to three decimal places.|
U.S. Dollar Facts
U.S. Dollar Index futures can allow traders the opportunity to assess value fluctuation, in relation to other currencies, with one transaction. Traders can also hedge their accounts against risk associated with a fluctuation. For 21 hours a day, U.S. Dollar Index futures are traded on the ICE.
Currency rates are determined by a one base currency quoted in relation to a different currency. Major currencies that are traded are floating. Central bank monetary policies can affect the value of currency. In the U.S., monetary policy is set by the Federal Open Market Committee (FOMC) of the Federal Reserve. For instance, low interest rates dictated as policy can be bearish for currency value because new money is being pumped into the market. This is unappealing to foreign investors because returns yield those low interest rates. In contrast, high interest rates set as policy are bullish and appealing to foreign investors because of high interest yields from the returns. Currency values can be also be affected by the nation’s current account balance. An excess or influx in the balance is considered to be bullish, while a deficit or drainage is considered to be bearish. Economic stability and investment in the country also help strengthen currency values because international investors are likely to buy into that country’s favorable markets.
Last updated May 2013
US Dollar News Article
- Pound endures third day of losses against euro (12/5/2013) - The monetary unit of England marked a third trading session of losses against the shared currency of the European Union on Thursday as policy makers with the Bank of England (BOE) prepare to issue their monthly policy decision, according to Bloomberg.
- Yen marks third consecutive day of gains against dollar, shared currency (12/5/2013) - The Japanese yen climbed on Thursday against the world's reserve currency and the common currency of the European Union, marking a third-straight day of gains against both rivals, according to Bloomberg.
- Aussie slides to three-month low against greenback (12/4/2013) - The Australian dollar plunged to its three-month low against the world's reserve currency on Wednesday after the country's gross domestic product was lower than economists' projections, according to Bloomberg.
- Aussie slips toward five-year low against kiwi (12/3/2013) - The Australian dollar was nearing its lowest value in five years against the monetary unit of New Zealand on Tuesday as policy makers with the central bank of Australia prepared to meet, according to Bloomberg.
- Won slides against greenback after release of strong U.S. manufacturing data (12/3/2013) - The South Korean won lost value on Tuesday against the world's reserve currency as speculation mounted that the U.S. Federal Reserve is preparing to taper economy-spurring monetary stimulus measures as a result of stronger economic data , according to Bloomberg.
- Aussie pushes ahead against greenback (12/2/2013) - The Australian dollar rose on the first trade session of December against the world's reserve currency after economic data released by the South Pacific nation indicated building approvals fell less than projected, according to Bloomberg.
- Yen slips against greenback, euro after Chinese manufacturing data climbs (12/2/2013) - The Japanese yen marked a fourth-straight day of losses on Monday against the world's reserve currency after China released economic data noting manufacturing advanced last month, according to Bloomberg.
- Euro pushes ahead against dollar, yen after German pact (11/27/2013) - The shared currency of the European Union climbed to its highest level in more than four years against the Japanese yen on Wednesday, pushed higher by an agreement between lawmakers in Germany, the largest economy in the euro zone, according to Bloomberg.
- Yen notches first gains in four days against greenback (11/26/2013) - The Japanese yen marked its first climb in four days on Tuesday against the world's reserve currency after Bank of Japan minutes from last month's policy meeting indicated members of the policy are concerned about the Pacific Rim nation's economic outlook, Bloomberg reports.
- Yen loses value against U.S. dollar, shared currency (11/25/2013) - The Japanese yen dove toward its lowest value in six months against the world's reserve currency after negotiators notched a pact over Iran's nuclear ambitions, Bloomberg reports.
US Dollar Blog Posts
- New Trade in March Euro (6EH3 DAILY) (2/22/2013) - This is a sample entry from Tom Dosdall’s email newsletter, Dosdall Daily Edge, published on February 21, 2013. Yesterday’s FOMC meeting minutes showed that the board is split on the potential for continuous “easy money” policies going forward. This news launched the US Dollar toward a fresh five month high. Couple the FOMC news with... Read More.
- Beyond the “Spotlight” (1/28/2013) - The Trade Spotlight advisory service applies the GBE trading methodology (buying or selling commodity contracts based on breakouts of chart formations and technical indicators) to identify one to two trade setups per week.
- Developing Trade in March Canadian Dollar (6CH3 DAILY) (12/12/2012) - This is a sample entry from Tom Dosdall’s email newsletter, Dosdall Daily Edge, published on December 12, 2012. The Canadian is attempting to grind higher again today and our TAS Tools are confirming a bullish trade opportunity. The market is expecting a friendly announcement toward further QE at today’s (US) FOMC meeting which would likely... Read More.
- Market Spotlight: US Dollar Index (10/10/2012) - The two key factors affecting a currency’s value are central bank monetary policy and the trade balance.
- The US Dollar and Inflation (9/28/2012) - The US Dollar Index is a measure of the value of the United States Dollar compared to a basket of currencies weighted accordingly: Euro 57.6 % weight Japanese yen 13.6 % weight Pound sterling 11.9 % weight Canadian dollar 9.1 % weight Swedish krona 4.2 % weight Swiss franc 3.6 % weight The US Dollar... Read More.
- Market Spotlight: British Pound (7/11/2012) - The British Pound (or pound sterling) is the world's oldest currency still in use dating back to Anglo-Saxon England in the middle 8th century. It's the official currency of the United Kingdom, its Crown Dependencies, and the British Overseas Territories.
- Why America Needs a Strong US Dollar (11/19/2010) - This post is part of Craig Turner’s Innovative Trading Concepts series. I’ve been hearing a lot lately that a weak US Dollar is good for America. The theory is a weak US Dollar will increase US exports. The American currency will be less valuable against foreign currencies, making US goods and services cheaper for foreign... Read More.