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 | |
| Contract Size | One contract = $1000 X Index value |
| 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 6:00 PM ET; Pre-Open at 5:30 PM ET |
| New York: 8:00 PM ET – 5:00 PM ET Next day | |
| London: 01:00 – 22:00 | |
| Singapore: 08:00 – 05:00 Next Day | |
| Product Code | DX |
| Quotation | US Dollar Index points, calculated to three decimal places .010 = $10 |
| Tick Size | .005 = $5 |
| Listed Contracts | Four months in the March/June/September/December quarterly expiration cycle |
| Daily Settlement | The volume-weighted average of all electronic trades transacted in the closing session (14:59 to 15:00 Eastern time). |
| Last Trade Date | 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. |
| Position Limits | The DX contract has no position limits. |
| Exchange | ICE Exchange |
| Source: The ICE | |
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.
Source: Barchart
Last updated September 2015
Additional Info
Recent Posts on the US Dollar
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- The USD in 2021: Is Inflation on the Horizon? (9/9/2020) - When it comes to addressing USD inflation and futures marketing, timing is everything. Inflationary cycles can arise quickly, wreaking havoc on sectoral or aggregate economic conditions. However, given the proper perspective, astute futures traders can mitigate inflation’s downside while taking advantage of the upside. What Is Inflation? Inflation is a periodic increase in the prices… Read more.
- Simple Ways to Buy Dollars (7/22/2020) - The US dollar (USD) is in a bit of a downward spiral in recent trade as it closed lower yesterday for the thirteenth time in the last seventeen trading days. More than 6% off its highs of mid-March, USD has fallen at the hands of a few different characters that mainly include the Australian dollar… Read more.