Dollar Index

The Dollar Index (DXY) measures the value of the US dollar against a basket of major currencies, with the euro carrying the largest weight. Because of this structure, DXY behaves as a rates‑driven, risk‑sensitive macro asset, and its movements can be explained with high accuracy by monitoring eight key indicators—ranked below from strongest to weakest influence.

1. US2Y – The Dominant Driver of USD Strength (Strongest)

The US 2‑Year Treasury Yield is the most powerful and immediate predictor of USD direction. It reflects Federal Reserve expectations and reprices instantly when markets anticipate policy changes.

  • US2Y ↑ → USD stronger

2. US10Y – The Backbone of Medium‑Term USD Trends

The US 10‑Year Treasury Yield captures long‑term capital flows and global demand for US assets.

  • US10Y ↑ → USD stronger This sets the tone for medium‑horizon USD direction.

3. DE10Y – The Best EURUSD Proxy

The German 10‑Year Bund Yield is the cleanest proxy for euro strength. Because EURUSD makes up 57% of DXY, this matters enormously.

  • DE10Y ↓ → EUR weaker → USD stronger The US10Y–DE10Y spread is the single best EURUSD predictor available in ShareScope.

4. VIX – The Risk‑Off Safe‑Haven Trigger

The CBOE Volatility Index (VIX) measures global fear and risk aversion.

  • VIX ↑ → USD stronger This is the most important risk sentiment driver of the dollar.

5. WTI Crude Oil – The Commodity‑Linked USD Driver

Higher oil prices disproportionately hurt Europe and Japan, both heavy importers.

  • WTI ↑ → USD stronger This makes oil a powerful cross‑asset USD indicator.

6. Gold (XAUUSD) – The Anti‑Dollar Asset

Gold and the dollar move inversely.

  • Gold ↓ → USD stronger This relationship is clean, stable, and widely used by macro traders.

7. S&P 500 (SPX) – Equity‑Driven Capital Flows

Strong US equity performance attracts global capital into USD‑denominated assets.

  • S&P 500 ↑ → USD stronger However, equities are secondary compared to yields, volatility, and commodities.

8. Nasdaq 100 (NDX) – The Weakest but Still Useful Driver

Tech leadership draws foreign investment, but its influence on USD is modest.

  • Nasdaq ↑ → USD stronger It is the weakest of the eight drivers but still directionally relevant.