The U.S. dollar is the world's primary reserve currency, held by central banks and used widely in trade and finance.
The Dollar Index (DXY) measures the dollar against six major currencies: euro, yen, pound, Canadian dollar, Swedish krona and Swiss franc.
Because gold is commonly quoted in U.S. dollars, analysts often study the two together.
Key definitions
- DXY
- A weighted index of the dollar against six major currencies; the euro carries the largest weight.
- Safe haven
- An asset investors may seek in times of stress.
Key takeaways
- Gold is quoted in dollars
- An inverse gold–dollar relationship is common but not guaranteed
- Rate expectations influence the dollar