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U.S. Dollar Index Futures

usdollar 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

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