U.S. Dollar Index: What It Is and Its Recent History

How Economic Policy Affects the Dollar's Value

A woman pockets her dollars after popping into a currency exchange booth.

JGI/Jamie Grill / Getty

The U.S. dollar index is a measurement of the dollar's value relative to six foreign currencies as measured by their exchange rates. Over half the index's value is represented by the dollar's value measured against the euro. The other five currencies include the Japanese yen, the British pound, the Canadian dollar, the Swedish krona, and the Swiss franc.

Key Takeaways

  • The elimination of the gold standard fostered the birth of the U.S. Dollar Index.
  • The U.S. Dollar Index tracks the dollar's value relative to six foreign currencies: the euro, Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc.
  • Economic conditions in the U.S, and abroad can affect the dollar's index value.
  • The dollar's index value reached its high point in 1985 and its low point in 2008.

Dollar Index Formula

The dollar index is calculated using the following formula of currency pairs:

USDX = 50.14348112 × EURUSD -0.576 × USDJPY 0.136 × GBPUSD -0.119 × USDCAD 0.091 × USDSEK 0.042 × USDCHF 0.036

The value of each currency is multiplied by its weight, which is a positive number when the U.S. dollar is the base currency. It's a negative number when the U.S. dollar is the quote currency. In the equation above, the euro has the most weight, followed by the Japanese yen and the British pound.

Euros and pounds are the only two currencies where the U.S. dollar is the base currency because they're quoted in terms of the dollar. For example, a euro might be worth $1.13. The others are quoted in terms of how many units a U.S. dollar will buy. For example, a dollar might be worth 109 yen.

Dollar Index History

The Federal Reserve created an official index (DXY) in 1973 to keep track of the dollar's value. Tracking the dollar's value relative to certain foreign currencies started in 1971, however, after President Nixon abandoned the gold standard, which allowed the value of the dollar to float freely in the world's foreign exchange markets. The dollar changes constantly in reaction to shifts in the ongoing forex trades. Before the creation of the dollar index, the dollar was fixed at $35 per ounce of gold, and it had been that way since the 1944 Bretton Woods Agreement.

The dollar index began at 100. The index has measured the percent change in the dollar's value since the establishment of its base value. Its all-time high was 163.83 on March 5, 1985. Its all-time low was 71.58 on April 22, 2008, 28.4% lower than at its inception.


The ICE Futures U.S. assumed management of the USDX in 1985. 

Historical Chart  

The following chart shows the U.S. dollar index value from the elimination of the gold standard in January 1971 to January 2022.

Historical Data

This is a summary of the main factors affecting the U.S. dollar index historical data, as measured by the DXY for the period from 2007 through Jan. 1, 2022:

2021: The index climbed from Jan. 1, 2021, through Jan. 1, 2022, to hit 103.46. Measures taken by the Fed, along with pandemic control measures implemented by the federal and state governments allowed the economy to recover, although inflation began to climb rapidly.

2020: The dollar rose until March 19 when it peaked at 102.82. Investors flocked to the safe-haven dollar in response to the COVID-19 pandemic. The Fed lowered the rate to zero in March. The USDX fell to its low for the year of 89.63 at closing on Dec. 30 as U.S. outbreaks grew worse. It ended the year slightly higher at 89.94.

2019: The dollar rose until April 24 when it peaked at 98.20. It fell to its low for the year of 95.98 on June 23. It then rose to its high of the year of 98.52 in July as the Fed began lowering rates. It went from 2.25% to 1.75% between August and October. The USDX ended the year at 96.39.

2018: The DXY fell to its low for the year of 88.59 on Feb. 15. Investors were paring back their dollar investments as Europe's economy continued to strengthen. But then the U.S. economy improved while others' faltered. The Fed raised rated four times, ending at 2.5%. The dollar index hit its 2018 high of 97.54 on Nov. 12 and ended the year at 96.17.

2017: Europe's economy improved, strengthening the euro. The ECB signaled that it might end QE. Hedge funds began shorting the dollar. The Fed raised rates in March, June, and December, ending at 1.5%. The dollar fell to 91.33, its low for that year, on Sept. 7. It ended the year at 92.12. 

2016: The dollar fell to its 2016 low of 92.63 on May 1. The Fed raised the fed funds rate to 0.75% in December. That supported the dollar, sending to 102.39 by year's end.

2015: The European Central Bank (ECB) launched QE, sending the euro down to $1.05 on March 12. That sent the USDX up to the year's high of 100.33 on March 12. The Fed raised its benchmark rate to 0.5% on Dec. 17 sending the dollar down to 98.63.

2014: The dollar remained stable for the first six months, hitting 80.12 on July 10. The Ukraine crisis and Greek debt crisis drove investors out of the euro and into the dollar as a safe haven. The Fed ended QE in October. It held an unprecedented $4.5 trillion in Treasury notes. It announced that it would raise the fed funds rate in 2015. The dollar rose 15% to 90.19 by Dec. 29.

2013: Obamacare tax increases kicked in, sending marginal tax rates to their highest point since 2000. The Fed announced on June 19 that it would taper off QE purchases. Investors sold bonds in a panic, increasing the yield on the 10-year Treasury note. The Fed delayed tapering until December. The DXY closed the year at 80.04. 

2012: The Fed announced QE3 on Sept. 13 and QE4 on December 9. The DXY closed at 79.77.

2011: The DXY fell to 73.03 on May 3 due to the U.S. debt crisis. Investors returned to the dollar after the eurozone crisis. The DXY ended the year at 80.17.

2010: The DXY rose to 87.51 on June 10, marking its high for the year. It fell to 79.03 by the year's end, despite the Fed's launch of QE 2 on Nov. 3.

2009: The DXY ended the year at 77.86. The European Central Bank lowered rates, signaling that it was responding to the crisis. The dollar fell as investors' confidence in the euro rose.

2008: The dollar fell to a record low of 71.33 on April 21 shortly after the Bear Stearns bailout signaled damage from the subprime mortgage crisis. Investors thought it only affected the U.S. and they bought euros, driving the dollar's value down. The Fed lowered the fed funds rate seven times and launched quantitative easing (QE) on Nov. 25. By the end of the year, it was clear that the 2008 financial crisis was worldwide. Investors returned to the dollar as a safe haven, sending it to 80.90 by year's end.

2007: The dollar's value, as measured by the DXY spot price, was 76.70 on Dec. 31.

Was this page helpful?
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. The ICE Futures U.S. "U.S. Dollar Index Contracts," Page 2.

  2. Federal Reserve History. "Creation of the Bretton Woods System."

  3. Yahoo! Finance. "USDX Historical Data."

  4. European Central Bank. "ECB Announces Expanded Asset Purchase Programme."

  5. Tax Policy Center. "Historical Highest Marginal Income Tax Rates."

  6. Board of Governors of the Federal Reserve System. "Federal Reserve Issues FOMC Statement: June 19, 2013."

  7. FRED Economic Data. "10-Year Treasury Constant Maturity Rate."

  8. Board of Governors of the Federal Reserve System. "FOMC Statement: Nov. 3, 2010."

  9. European Central Bank. "Key ECB Interest Rates."

  10. Board of Governors of the Federal Reserve System. "November 25, 2008 Press Release."

  11. Board of Governors of the Federal Reserve System. "Open Market Operations."

Related Articles