Monitor and hedge moves in the U.S. dollar relative to a basket of world currencies with ICE U.S. Dollar Index (USDX) futures. With continuous market access and deep liquidity, ICE USDX is the leading index futures for the U.S. dollar and is relied upon for risk management. Today, it’s the primary benchmark for the international value of the U.S. dollar and the world’s most widely-recognized traded currency index, with approximately $4 billion in notional value traded daily.
Our USDX complex includes futures, options on futures and mini USDX futures. The contract offers capital efficiencies through margin offsets across our wider FX portfolio.
Composition & Calculation of the Index
The ICE USDX is based on an index created by the U.S. Federal Reserve in 1973 and is unique among currency indices in its fixed composition. The composition of the index was changed only once in January 1999 when the Euro launched, replacing a number of European currencies. The net representation of the European legacy currencies remained fixed at 57.6%.
The ICE USDX is a geometrically-averaged calculation of six currencies weighted against the U.S. dollar, and is calculated in real time every 15 seconds using the spot prices of the index’s component currencies. The price used for the calculation of the index is the mid-point between the best bid and offer in the component currencies.
The USDX reached a high of 164.72 in February 1985 and a low in March 2008 with a value of 70.698. As of June 29, 2017, the index carried a value of 95.62, meaning that overall the U.S. dollar has depreciated versus the basket of currencies since the index started in 1973. The index is greatly affected by macroeconomic factors, including inflation/deflation in the U.S. dollar and foreign currencies included in the basket as well as recessions and economic growth in those countries.
ICE U.S. Dollar Index Level
USDX Futures Trading Opportunities
The principal advantages of ICE USDX futures are their cost-efficiency, liquidity and transparency. Instead of paying bid-ask spreads on six separate currencies, participants can go long or short on those currencies with only one bid and ask spread. If held through settlement, ICE USDX futures are settled physically in the component currencies.
Volume and open interest growth in recent years has been driven by new market participants, including hedge funds, CTAs, liquidity providers, and the evolving hedging needs of the market in terms of transparency, clearing and efficiency. As the leading means of using futures to hedge U.S. dollar exposure versus a basket of key currencies, the ICE USDX is globally recognized as the benchmark FX future index.
USDX Futures & Options Performance