WHAT IS DOLLAR INDEX?

 The US Dollar Index (USDX) is an index (or measure) of the value of the
United States dollar relative to a basket of foreign currencies.
 It is a weighted geometric mean of the dollar's value compared only with
 Euro (EUR), 57.6% weight
 Japanese yen (JPY), 13.6% weight
 Pound sterling (GBP), 11.9% weight
 Canadian dollar (CAD), 9.1% weight
 Swedish krona (SEK), 4.2% weight and
 Swiss franc (CHF) 3.6% weight.
 More on USDX…
 USDX is updated whenever US Dollar markets are open, which is
from Sunday evening New York time (early Monday morning Asia
time) for 24 hours a day to late Friday afternoon New York time.
 USDX can be traded as a futures contract on the Intercontinental
Exchange (ICE). It is also available in exchange traded funds (ETFs),
options and mutual funds.
 It is widely used to hedge risk in the currency markets or to take a
position in the US Dollar without having the risk exposure of a single
currency pair.
 USDX goes up when the US dollar gains "strength" (value) when
compared to other currencies.
VALUES IN 2010 ADVANTAGE
 77.80 JAN  investors can take
 80.16 FEB advantage of moves in the
 80.68 MARCH value of the US dollar
 81.23 APRIL
relative to a basket of
world currencies or can
 85.42 MAY
hedge their portfolio of
 86.58 JUNE assets against the risk of a
 83.14 JULY move in the US dollar in a
 81.30    AUG single transaction.
 CORRELATION BETWEEN USDX AND OTHER INDEX

 the correlation coefficient calculated for the USDX versus the DJIA,
Nasdaq and S&P 500, is 0.35, 0.39 and 0.38, respectively.
 each coefficient is below 0.4, which means that only about 35% to
40% of the stock indexes' movements are associated with the
movement of the U.S. dollar.
 The value of American stocks, especially those that are included in
market indexes, tend to increase along with the demand for U.S.
dollars - in other words, they are positively correlated.
 . As more and more investors put their money in U.S. equities, they
are required to first buy U.S. dollars, which can be used to purchase
American stocks, causing the indexes to increase in value
RELATION BETWEEN USDX AND DOW JONES