DOLLAR INDEX DAILY REJECTION ON PCE OUTLOOK.US Dollar IndexCAPITALCOM:DXYShavyfxhubDXY , U.S. Dollar Index measures the value of the U.S. dollar (USD) against a weighted basket of six major foreign currencies.  Basket Composition (Weights) • Euro (EUR): 57.6% (dominant component) • Japanese Yen (JPY): 13.6% • British Pound (GBP): 11.9% • Canadian Dollar (CAD): 9.1% • Swedish Krona (SEK): 4.2% • Swiss Franc (CHF): 3.6%  Base value: Established at 100 in 1973. • DXY > 100 → USD is stronger than in 1973. • DXY < 100 → USD is weaker.  Current level (as of mid-June 2026): Approximately 99.5–99.6 (near neutral, slightly below the base).  It is calculated as a geometric mean and traded via futures on ICE. How DXY Affects Interest Rates The relationship is bidirectional but primarily driven by interest rates: • Higher U.S. interest rates (e.g., rising Fed Funds Rate or US10Y Treasury yields) → Attract foreign capital seeking better returns → Stronger USD → Higher DXY.  • Lower U.S. interest rates → Reduce USD attractiveness → Weaker USD → Lower DXY. US10Y yields and DXY often move together (positive correlation), though it’s not perfect due to other factors like economic data, inflation expectations, or risk sentiment.  #dxy