The US Dollar Index (DXY) measures the US Dollar's value against a basket of six currencies: Euro (57.6%), Japanese Yen (13.6%), British Pound (11.9%), Canadian Dollar (9.1%), Swedish Krona (4.2%), and Swiss Franc (3.6%).
The DXY's direction is almost entirely determined by the interest rate differential between US Treasuries and comparable sovereign bonds in the Eurozone, Japan, UK, Canada, Sweden, and Switzerland. FOMC decisions are the highest-impact events for DXY.
A rising DXY creates triple pressure on India: (1) The Rupee weakens; (2) Commodity prices in USD terms tend to fall; (3) Foreign capital exits Indian bonds and equities. Historically, sustained DXY above 105–106 has coincided with Indian equity market corrections.
Risk Disclaimer: Commodity futures trading involves substantial risk of loss. The data and analysis on MCX Trends are for educational purposes only and do not constitute investment advice. Always consult a SEBI-registered investment advisor.