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🧵on dominant USD💵

USD has been on upward swing since mid 2021 and has jumped sharply more recently

❓What is $ Index?
❓USD💵role in global economy? <- reserve currency
❓Why it is so 'strong' right now?
❓What drive it?
❓Will it collapse?

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What is $ Index?

The US Dollar Index (USDX, DXY, DX, or, informally, the "Dixie") is a measure of the value of USD💵relative to a basket of foreign currencies often referred to as a basket of U.S. trade partners' currencies.

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🌟The elimination of the gold standard fostered the birth of DXY

🌟DXY was originally developed by US Fed in 1973 to provide an external bilateral trade-weighted avg value of the USD against global currencies

🌟DXY reached its high point in 1985 and its low point in 2008

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The following six currencies are used to calculate the index. It is a weighted basket

1⃣Euro (EUR) 57.6%
2⃣Japanese yen (JPY) 13.6%
3⃣Pound sterling (GBP) 11.9%
4⃣Canadian dollar (CAD) 9.1%
5⃣Swedish krona (SEK) 4.2%
6⃣Swiss franc (CHF) 3.6%

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What is a Reserve Currency?

⭐️has depth and liquidity to allow reliable & efficient international transactions
⭐️freely and easily exchanged for other currencies
⭐️held by many monetary institutions in significant amounts
⭐️A large % of commodities are priced in it