Hi There's a formula for calculating USDX: USDX=50.14348112*eurusd^(-0.576)*usdjpy^(0.136)*gbpusd^(-0.119)*usdcad^(0.091)*usdsek^(0.042)*usdchf^(0.036) Is it stable forever? We see that EURUSD and GBPUSD have negative powers in this formula. What's the reason? I guess the reason is that EUR and GBP are more powerful currencies than USD. So for example right now that cad is more powerful than USD, can it be a factor to change the formula? Thanks
No. AFAIK it is trade weighted and is recalibrated periodically. The coefficients are negative because the USD is the "terms," or right-hand side, of the pair. If USD were the "base," or left-hand side, the coefficients would be positive.