Dollar index

In plain terms

It shows at a glance how strong the dollar is against other major currencies. The index started at 100 in March 1973 and uses fixed weights for the euro, yen, pound, Canadian dollar, Swedish krona and Swiss franc. The euro carries the largest weight, 57.6%, so the index largely reflects the dollar's move against the euro.

Why it matters

The dollar sits at the center of world trade and finance, so changes in its value move commodity prices, flows into emerging markets and exporters' earnings.

How it connects to markets

• A rising dollar index: gold and other commodities tend to fall (they are priced in dollars, so they get pricier for buyers using other currencies), and money tends to leave emerging-market stocks
• A falling dollar index: usually supportive for commodities and emerging-market assets
• The biggest drivers are expectations for US rates, risk aversion and how strong the US economy looks compared with others

Where to check

• ICE U.S. Dollar Index (USDX)