The US Dollar Index Binary Options Tool -

The US Dollar Index Binary Options Tool

Trading requires many analysis tools. Binary options Traders and global market observers use these tools to predict and make investments that could prove to be profitable in the future. US Dollar Index is one such tool that aids in understanding the current market state better. As the name suggests, it is an index which tells where the US Dollar stands. The tool is extensively used by forex and binary options traders to measure the strength of the US currency. Based on the value assumed by the US Dollar, in relation to other selected currencies, the traders formulate their investment plans. Some even use the tool to study the history of the currency over time.

About US Dollar Index

Here are some points that elaborate the concept of US Dollar Index,

  • US Dollar Index is abbreviated as USDX.
  • It is a tool that is used to measure the value of US Dollar in comparison to a set of other currencies.
  • The set of currencies that is used for relative measuring consists of – Yen, Euro, Swedish Krona, Canadian Dollar, Pound Sterling and Swiss Franc. The countries that us these currencies are said to be the “basket” .
  • The tool came into existence in 1973. The countries contained in the “basket” and the US came together to form an agreement to calculate the relative value of US Dollar.

How does US Dollar Index work?

Here is how you can make sense of the US Dollar Index,

  • The tool is basically a graph that depicts the plight of US Dollar over time. The index calculation is done on daily basis for 5 days in a week.
  • The graph goes up if the value of US dollar rises in comparison to other considered currencies.
  • The starting of the timeline is marked as 1973 March.
  • The base value of the graph is 100.00. For example, if the index reads 110.00 then there has been an increase of 10% in US dollar value. Likewise, if it reads 80.00 then there has been a decrease of 20%.

The “basket” consists of 22 countries, 17 of which follow the EUR standards and the rest 5 countries listed in the set. Though the countries are less in number, since US Dollar impacts many countries, the USDX is monitored by a lot of people across the globe. Thus the US Dollar Index is marked as a vital trading tool.

2 Responses to “The US Dollar Index Binary Options Tool”

  1. Negedu says:

    Thanks for the advise or lesson.i pray to apply this knowledge make good profit and pay you all a visit that we would partner and do more business in the US and Nigeria

  2. […] US Dollar Index Binary Options Tool […]

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