Guide · Last reviewed 28 October 2026 · By the CryptoUpdate Newsroom. This is an explainer, not investment advice.
“The dollar is up” usually refers to one number: the US Dollar Index, or DXY. Crypto and gold traders watch it, and currency headlines quote it daily. It is also easy to misread. It covers only six currencies, the euro dominates it, and it is not the measure the Federal Reserve uses. This guide explains how the index is built, what moves it, where it has been in 2026 and how it relates to bitcoin and gold. It does not forecast where the dollar goes next.
In short
- The ICE US Dollar Index measures the dollar against six currencies. The euro alone is 57.6% of it. March 1973 = 100.
- The Fed’s broad dollar index covers 26 economies, including China and Mexico, and better reflects US trade.
- Interest-rate differentials are the main short-term driver. Growth, risk sentiment, oil and the reserve-currency role also matter.
- In 2026 the DXY closed between 96.22 (27 January) and 102.58 (12 October). It read 102.43 on 28 October.
- Daily DXY moves have been negatively correlated with bitcoin and gold this year, but the link is weak and unstable.
What the US Dollar Index is
The US Dollar Index (ticker DX at ICE; “DXY” is Bloomberg’s symbol and Yahoo Finance uses DX-Y.NYB) is a geometrically weighted average of the dollar’s exchange rate against six currencies. According to ICE Futures U.S., the Federal Reserve developed it in 1973, after major economies let their currencies float, and the base is March 1973 = 100. A reading of 102 means the dollar is about 2% stronger against this basket than in March 1973. It says nothing about “fair value”.
ICE publishes the formula:
USDX = 50.14348112 × EURUSD^(-0.576) × USDJPY^(0.136) × GBPUSD^(-0.119) × USDCAD^(0.091) × USDSEK^(0.042) × USDCHF^(0.036)
The exponents are the weights. They are negative for the euro and the pound because those pairs quote the dollar second. The original index had ten currencies, and the euro replaced five of them (the German mark, French franc, Italian lira, Dutch guilder and Belgian franc). ICE says that was the only adjustment and there is no scheduled rebalancing. The index is calculated about every 15 seconds. Futures have traded since 20 November 1985, and each contract is worth $1,000 times the index.
| Currency | Weight in DXY | Pair used | 2026 weight in Fed broad index |
|---|---|---|---|
| Euro (EUR) | 57.6% | EUR/USD | 21.0% (euro area) |
| Japanese yen (JPY) | 13.6% | USD/JPY | 5.2% |
| British pound (GBP) | 11.9% | GBP/USD | 5.2% |
| Canadian dollar (CAD) | 9.1% | USD/CAD | 12.8% |
| Swedish krona (SEK) | 4.2% | USD/SEK | 0.6% |
| Swiss franc (CHF) | 3.6% | USD/CHF | 3.0% |
| Chinese yuan, Mexican peso and 18 others | 0% | – | China 10.9%, Mexico 14.8%, others 26.5% |
Sources: ICE Futures U.S. (DXY weights); Federal Reserve H.10 currency weights, 2026 column.
DXY vs the Fed’s broad dollar index
The Federal Reserve publishes the Nominal Broad U.S. Dollar Index in its weekly H.10 release, charted on FRED as DTWEXBGS (January 2006 = 100). It covers 26 economies weighted by trade. Mexico, Canada and China together carry more weight than the euro area, and India has 3.4%.
The two can diverge. From the end of 2025 to 23 October 2026 the broad index rose from 119.75 to 121.32, about 1.3%. Over the same dates DXY rose from 98.28 to 101.81, about 3.6%. For the dollar against the countries the US actually trades with, use the broad index. For the number traders and headlines quote, use DXY.
What moves the dollar
1. Interest-rate differentials and the Fed
When US rates rise relative to rates abroad, dollar deposits and Treasury bills pay more, and money tends to flow into the dollar. Markets trade the expected path, so the dollar often moves on Fed communication and inflation data before any decision.
2026 shows why the gap matters more than the US rate alone. The Fed held its target range at 3.50-3.75% from December 2025 until its 15-16 September 2026 meeting, when it raised it by a quarter point to 3.75-4.00% on a 12-0 vote, saying inflation “remains elevated”. Others tightened too. The ECB raised its deposit rate to 2.25% (effective 17 June) and 2.50% (effective 16 September). The Bank of Japan raised its policy rate to around 1.25% on 18 September. The Bank of Canada held at 2.25% at every 2026 decision through 2 September. No decision from the Fed’s 27-28 October meeting had been published when this guide was reviewed; check the FOMC calendar.
The US 10-year Treasury yield rose from 4.16% at the end of 2025 to a 2026 high of 5.31% on 5 October and was 4.99% on 27 October (Yahoo Finance).
2. Relative growth
Stronger US growth than abroad tends to support the dollar because it attracts investment and makes Fed cuts less likely. Weak US data, such as a soft jobs report, can push the dollar down within minutes, as in our July report on a weekly dollar drop after jobs data.
3. Risk sentiment and safe-haven flows
In acute stress, investors and companies scramble for dollars to repay dollar debts and buy Treasuries, so the dollar often rises when stocks fall. That is not guaranteed: when the US is the source of the shock, the dollar can fall with US assets. The yen and Swiss franc compete for the haven role, and both are in DXY.
4. Oil and terms of trade
A higher oil price usually helps exporters’ currencies, such as Canada’s, and hurts importers such as Japan and India. In 2026 WTI crude futures rose from $57.42 at the end of 2025 to a peak close of $112.95 on 7 April and were $101.53 on 28 October (Yahoo Finance). The Bank of Japan’s September statement cites “the situation in the Middle East” and high crude prices among the forces weighing on Japan’s economy.
5. The reserve-currency role
The dollar dominates central-bank reserves, trade invoicing and global debt, which creates steady demand. IMF COFER data show the dollar at 56.70% of world foreign-exchange reserves in Q2 2026, down from 57.18% in Q1, with the euro at 20.60% (IMF, 30 September 2026). The share changes slowly. It explains the dollar’s central role, not last week’s move.
The dollar in 2026: what the data show
Several of our July 2026 posts quoted conflicting DXY levels, from 92 to 103. The actual daily closes in July 2026 ranged from 99.80 to 101.51. Yahoo Finance closing data for DX-Y.NYB (retrieved 28 October 2026):
| Point | Date | DXY close |
|---|---|---|
| End of 2025 | 31 Dec 2025 | 98.28 |
| 2026 low (close) | 27 Jan 2026 | 96.22 |
| End of March | 31 Mar 2026 | 99.96 |
| End of June | 30 Jun 2026 | 101.19 |
| End of August | 31 Aug 2026 | 99.43 |
| 2026 high (close) | 12 Oct 2026 | 102.58 |
| Latest | 28 Oct 2026 | 102.43 |
That is a rise of about 4.2% year to date, along an uneven path, with a rally through September and October that included the Fed’s rate rise. The intraday extremes were 95.55 (27 January) and 102.95 (14 October).
Three pairs as examples: CAD, INR and JPY
| Pair | 31 Dec 2025 | 2026 range (closes) | 28 Oct 2026 | Change |
|---|---|---|---|---|
| USD/CAD | 1.3695 | 1.3492 (30 Jan) to 1.4280 (12 Oct) | 1.4045 | +2.6% |
| USD/INR | 89.77 | 89.86 (8 Jan) to 96.88 (23 Jul) | 95.22 | +6.1% |
| USD/JPY | 156.41 | 152.45 (28 Jan) to 163.86 (28 Jul) | 157.90 | +1.0% |
Source: Yahoo Finance daily closes.
USD/CAD is 9.1% of DXY and the third-largest weight in the broad index. It reflects the Fed-Bank of Canada rate gap (3.75-4.00% against 2.25% at review) and oil. The oil link did not dominate this year: the Canadian dollar was weaker in October than in April despite crude above $100. A “USD/CAD forecast 2026” is only useful if it states assumptions for both central banks and oil.
USD/INR is not in DXY. The rupee is a managed currency: the Reserve Bank of India intervenes to smooth moves, so it tends to move in smaller, steadier steps than free floaters. India imports most of its oil, so high crude prices weigh on it. The RBI website listed a policy repo rate of 5.50% on 28 October 2026.
USD/JPY is DXY’s second-largest component. Japan’s policy rate is far below the Fed’s. The BoJ raised it to around 1.25% in September and said it would keep raising rates if its outlook is realised. The dollar is down from its July high near 164 yen but still about 1% up on the year.
Iran’s rial is not in the index
Readers often ask how the dollar index relates to currencies such as the Iranian rial. It doesn’t: neither DXY nor the Fed’s broad index includes Iran. The rial is tightly managed and under heavy sanctions, and official rates have often differed sharply from open-market rates, which is why rial quotes vary so much between websites. For such currencies, sanctions, capital controls, inflation and central-bank rules matter far more than DXY. Our USD/IRR analysis from July 2026 covers the rial’s reaction to US-Iran talks; treat its figures as a snapshot from that week.
How the dollar relates to gold and bitcoin
Both are priced in dollars, so a stronger dollar makes them dearer in other currencies, and higher US yields raise the cost of holding assets that pay no interest. Both point to an inverse relationship. Gold’s drivers are covered in our gold price outlook guide.
For bitcoin, risk appetite seems to matter more. An IMF analysis of 11 January 2022 found bitcoin’s correlation with the S&P 500 rose from about 0.01 in 2017-2019 to 0.36 in 2020-2021. A strong dollar often coincides with tighter financial conditions, so part of bitcoin’s dollar link may run through that channel.
We checked 2026 ourselves. Method: Pearson correlation of daily log returns of DXY, bitcoin (BTC-USD) and COMEX gold futures (GC=F), using Yahoo Finance closes on the 207 days from 31 December 2025 to 28 October 2026 when DXY traded.
| Correlation with DXY daily returns | Bitcoin | Gold futures |
|---|---|---|
| 2026 to date | -0.20 | -0.40 |
| Latest 90 trading days (23 Jun to 28 Oct) | -0.31 | -0.45 |
| Range of rolling 90-day windows | -0.11 to -0.43 | -0.27 to -0.59 |
| October 2026 only (20 days) | -0.07 | -0.20 |
The sign was negative in every window: on days the dollar rose, bitcoin and gold tended to fall. But a correlation of -0.31 means the dollar “explains” only about a tenth of bitcoin’s daily variation, and the strength changed a lot within months. Two caveats: bitcoin trades around the clock and its daily close is taken at a different time from DXY’s, which weakens measured correlation, and the gold futures series rolls between contracts. A past correlation is not a trading rule.
How to read a dollar forecast
- Which dollar? A DXY call is mostly a euro call. It may not apply to the peso, rupee or yuan.
- What horizon? Three-month views rest on rates and positioning; multi-year views on growth, inflation and the reserve role.
- What assumptions? A good forecast states a path for the Fed, the other central banks and often oil. A surprise decision makes it stale.
- Forward rates are not forecasts. Currency forwards mainly reflect the interest-rate gap, not an expected move.
- Who and when? Check the date and track record. A bank target quoted months later is a snapshot.
A dollar dashboard you can check yourself
| What | Indicator | Where to find it | Update frequency |
|---|---|---|---|
| Headline dollar | ICE US Dollar Index (DX) | ICE, market-data sites | Real time |
| Trade-weighted dollar | Broad index; AFE and EME sub-indexes | FRED DTWEXBGS, DTWEXAFEGS, DTWEXEMEGS; Fed H.10 | Daily data, published weekly |
| Fed policy | Fed funds target range | FRED DFEDTARU / DFEDTARL; federalreserve.gov | Eight meetings a year |
| Rate expectations | 2-year and 10-year Treasury yields | FRED DGS2, DGS10 | Daily |
| Single pairs | USD/CAD, USD/INR, USD/JPY | FRED DEXCAUS, DEXINUS, DEXJPUS | Daily data, published weekly |
| Positioning | Speculative positions in dollar index futures | CFTC Commitments of Traders | Weekly (Friday) |
| Reserve role | Currency shares of FX reserves | IMF COFER | Quarterly |
Related coverage on CryptoUpdate
These are dated news items from July 2026. Some quoted DXY levels that do not match the closing data above.
- Dollar Index analysis: reactions to Fed policy shifts
- DXY and the Fed minutes
- USD/CAD ahead of the Fed and BoC meetings
- INR/USD and the impact of oil prices on the rupee
- USD/JPY trends
- Gold and geopolitical tensions (July 2026 report)
Frequently asked questions
What is the DXY?
DXY is the common name for the ICE US Dollar Index. It measures the dollar against the euro (57.6%), yen (13.6%), pound (11.9%), Canadian dollar (9.1%), Swedish krona (4.2%) and Swiss franc (3.6%), using a geometric average with March 1973 = 100.
What is the difference between DXY and the broad dollar index?
DXY has six fixed, mostly European currencies. The Fed’s broad dollar index (FRED DTWEXBGS) covers 26 economies weighted by US trade, including Mexico, China and India. From the end of 2025 to 23 October 2026, DXY rose about 3.6% and the broad index about 1.3%.
What makes the US dollar go up or down?
The biggest short-term driver is the gap between US and foreign interest rates, including expected Fed decisions. Relative growth, risk sentiment, oil prices and the dollar’s reserve-currency role also matter.
Does a stronger dollar mean bitcoin falls?
Often, but not reliably. In 2026 the correlation of daily DXY and bitcoin returns was about -0.20, ranging from -0.11 to -0.43 across rolling 90-day windows. The dollar explains only a small part of bitcoin’s daily moves.
Why does gold usually fall when the dollar rises?
Gold is priced in dollars, so a stronger dollar makes it dearer for other buyers, and higher US rates raise the cost of holding an asset with no yield. In 2026 the daily correlation of DXY and gold futures returns was about -0.40.
Where can I check the dollar index myself?
ICE publishes the index and its futures. The Fed’s H.10 release and FRED carry the broad index and exchange rates, the CFTC’s weekly Commitments of Traders shows positioning, and the IMF’s COFER data track the dollar’s share of reserves.
Sources
- ICE Futures U.S., U.S. Dollar Index Contracts FAQ (2015) and futures specifications (accessed 28 Oct 2026)
- Federal Reserve, H.10 currency weights (2026) and FRED DTWEXBGS (data to 23 Oct 2026)
- Federal Reserve, FOMC statement (16 Sep 2026) and target range history
- ECB, Key ECB interest rates; Bank of Canada, Policy interest rate; RBI, homepage rates (all accessed 28 Oct 2026)
- Bank of Japan, Change in the Guideline for Money Market Operations (18 Sep 2026)
- IMF, COFER data brief, Q2 2026 (30 Sep 2026) and IMF Blog on crypto and stocks (11 Jan 2022)
- CFTC, Commitments of Traders
- Yahoo Finance daily closes for DX-Y.NYB, BTC-USD, GC=F, CL=F, ^TNX, CAD=X, INR=X and JPY=X, 31 Dec 2025 to 28 Oct 2026 (retrieved 28 Oct 2026)
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