USD index

Discussion in 'Forex' started by Piptaker, Jul 22, 2016.

  1. Cswim63

    Cswim63

    Momentum has shifted back to bearish Usd. Not really what you would call a trending market yet. Watching usdcad especially, seems to be holding below 1.31. Equities supportive as well, seem to be riding that proverbial wall of worry. Dont think I'd want to be in bonds right now. Seems like a ton of money rushed to safety last quarter. I keep wondering what happens if the economy reignites despite all the pessimism. Its happened before.
     
    #1861     Jul 10, 2019
  2. The U.S. Dollar index measures the value of U.S. Dollar in relation to the other handful of foreign currencies. It was started in March, 1973 with a value of 100.000. The value of this index goes up if the value of U.S. dollar is above as compared to the other currencies. The responsibility to maintain this index is on the American company, Intercontinental Exchange.

    The value of U.S. dollar is compared to the value of currencies like Euro, Japanese Yen, Pound Sterling, Canadian dollar, Swedish krona and Swiss franc. All these currencies carry a different weight, according to which they affect the index. The weights are given below:-
    • Euro - 57.6% weight

    • Japanese yen - 13.6% weight

    • pound sterling - 11.9% weight

    • Canadian dollar - 9.1% weight

    • Swedish krona - 4.2% weight

    • Swiss franc - 3.6 % weight
    You can trade the index directly as a future contract with the ICE Exchange or it is also available in an indirect manner in the form of ETFs, mutual funds, options, etc.
     
    #1862     Jul 13, 2019
    Ironman777 likes this.
  3. Cswim63

    Cswim63

    Pretty weak rally against Usd so far.
     
    #1863     Jul 16, 2019
  4. pipeguy

    pipeguy

    Are these relative value changes over time or the index is composed from currencies in these fixed shares?
     
    #1864     Jul 17, 2019
  5. I think the USD index will surpass the peak of 98.35 soon!
     
    #1865     Jul 25, 2019
  6. themickey

    themickey

    Putin’s Pledge to Ditch the Dollar Is Slowly Becoming a Reality
    By Andrey Biryukov, August 4, 2019, 11:00 AM GMT+8

    Euro closes in on dollar as top currency for exports to EU
    India agreed to pay Russia in rubles for defence sales

    Russia is acting on a pledge by President Vladimir Putin to shrink the role of dollar in international trade as tensions sour between Washington and Moscow.

    The shift is part of a strategy to “de-dollarize” the Russian economy and lower its vulnerability to U.S. sanctions. But while the central bank was able to quickly dump half of its dollar holdings last year, progress in trade has been slow due to ingrained use of the greenback for many transactions.

    The share of euros in Russian exports increased for a fourth straight quarter at the expense of the U.S. currency, according to central bank data. The common currency has almost overtaken the dollar in trade with the European Union and China and trade in rubles with India surged. The dollar’s share in import transactions remained unchanged at about a third.

    “There’s been a strong incentive to change, not just for Russia but for its trading partners too,” said Dmitry Dolgin, an economist at ING Bank in Moscow. “The European Union is also now facing trade pressure from the U.S.” pushing them to try to reduce dependence on the dollar, he said.

    The euro came close to replacing the dollar as the currency of choice for Russian exports to the European Union, with its share climbing to 42% in the first quarter from 32% a year earlier.

    Russia still relies on the dollar for more than half of its $687.5 billion annual trade, though less than 5% of those deals are with the U.S. Part of Russia’s motivation to shift is that companies suffer delays on as much as a third of international payments in dollars because Western companies have to check with the U.S. whether the transactions are allowed, Russian Finance Minister Anton Siluanov said in December.

    The euro’s share also increased in Russia’s $108 billion annual trade with China, jumping to more than a third of export settlements in the first quarter from almost nothing at the start of 2018. This shift, which covers commodity sales and big state contracts, has been accelerated by the development of payment infrastructure at the central bank and other lenders, according to Sofya Donets, an economist at Renaissance Capital in Moscow.

    Trade in yuan is difficult because of capital restrictions that limit foreigners’ access to Chinese assets, Dmitry Timofeev, who heads the Finance Ministry’s sanctions department, told the RBC newspaper.

    “The yuan isn’t completely convertable, which means it can’t play a significant role in world trade,” Timofeev said.

    The most dramatic shift is visible in Russia’s $11 billion trade with India. The ruble accounted for three quarters of total settlement in exports between the two emerging markets after they agreed on a new payment method through their national currencies for multi-billion-dollar defense deals.

    “The trend is likely to continue because the infrastructure for transactions in alternative currencies is improving,” Renaissance Capital’s Donets said. “Russia won’t be able to give up using the dollar completely though, especially for trade of oil.”
    https://www.bloomberg.com/news/arti...ditch-the-dollar-is-slowly-becoming-a-reality
     
    #1866     Aug 4, 2019
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  7. themickey

    themickey

    Has been quiet on this thread of late, so my call, we've seen a mini blowoff top Friday after a $2 runup in 5 days, a good solid run to $99 level.
    Could easily pull back from here a tad, it needs a breather after that sort of gallop.

    5 year chart below with possible future level of $1.00 attainable
    index(2).png
    6 monthly chart below.
    index.png
    1 day chart hourly bars, indicating a good solid move, looks bullish but after such a steep rise in 5 days it may rest up a tad, not sure if the long weekend Labor day had an influence on that move.
    index(3).png
     
    #1867     Sep 1, 2019
  8. pipeguy

    pipeguy

    Dollar will need some very strong catalyst to break through 100 level. If not the failure of trade talks then what? But the parties are back to negotiating table.
     
    #1868     Sep 8, 2019
  9. Cswim63

    Cswim63

    1.1050 key area Euro usd. That looks like a successful retest of the recent lows. Usd now on the defensive, equities really strong and climbing a wall of worry.
     
    #1869     Sep 12, 2019
  10. pipeguy

    pipeguy

    Yes dollar is getting dumped in exchange for risk, I think after recent skew towards safety there should be backlash as fundamentals improve.
     
    #1870     Sep 12, 2019