Dollar index (DXY)
Dollar strength. Market fear and the dollar.
Updated
What is it?
How much the dollar is worth against the world’s main currencies.
Global strength of the dollar. Above 106 it drains cross-border liquidity and strains emerging markets.
Why does it matter?
A very strong dollar makes dollar debts more expensive worldwide and makes life harder for emerging countries.
What has happened in other crises?
Highs: around 120 in 2001 and 114 in 2022.
When should it be a concern?
It is a concern when the dollar is very strong and pressuring other economies. Crisis Monitor turns each reading into a score from 0 to 100 using these bands:
| Situation | Value | What does it mean? |
|---|---|---|
| Calm | ≤ 97.00 | Score 0: no stress |
| Watch | ≥ 102.00 | Score 33: starts to draw attention |
| Stress | ≥ 106.00 | Score 66: risk zone |
| Extreme | ≥ 112.00 | Score 100: like in the worst crises |
Between one band and the next, the score is interpolated.
Dollar index in past crises
Since January 1990, its weekly low was 71.46 (Mar 2008) and its high was 120.05 (Jun 2001). The typical level (the median) is 92.92.
| Crisis | At the start | High during the crisis |
|---|---|---|
| 1990-91 recession | 90.28 | 91.08 (Mar 1991) |
| Russia and LTCM 1998 | 100.47 | 102.17 (Aug 1998) |
| Dot-com bubble and 2001 recession | 105.50 | 120.05 (Jun 2001) |
| Global Financial Crisis 2007-09 | 78.67 | 89.01 (Mar 2009) |
| European debt crisis 2011 | 72.95 | 79.45 (Sep 2011) |
| 2015-16 market scare | 94.19 | 100.17 (Nov 2015) |
| Q4 2018 sell-off | 94.51 | 97.54 (Nov 2018) |
| COVID panic 2020 | 99.12 | 102.49 (Mar 2020) |
| 2022 bear market | 96.24 | 114.10 (Sep 2022) |
Weekly data. Crises that do not appear predate the series.
How does Crisis Monitor use it?
- Area: Markets, currency and safe havens (15% of the index). Fear in the stock market, the strength of the dollar and whether investors are rushing to safe havens.
- When does it move? Moves with the crisis.
- Data frequency: daily.
- Quick alarm: Yes, it is one of the 5 ignition points.
The index combines 17 indicators. See the methodology to learn how it is calculated.
Data source
Yahoo Finance (DX-Y.NYB). Data may arrive late and does not constitute financial advice.
Frequently asked questions
What does the DXY measure?
The value of the dollar against a basket of six currencies: the euro, yen, pound, Canadian dollar, Swedish krona and Swiss franc.
Why can a strong dollar be a bad sign?
It makes dollar debts more expensive for companies and countries that do not earn in dollars, and in moments of panic it reflects a flight to safety.