USD Trade-Weighted Index (DTWEXBGS, Broad Goods + Services)
The Federal Reserve's broad trade-weighted USD index (DTWEXBGS) from 2006 onwards. Tracks the USD's value against a weighted basket of major trading partners' currencies including AUD, EUR, JPY, CNY, GBP, CAD, MXN and others. This is the Fed's preferred USD index for policy analysis, more comprehensive than DXY (which is heavily EUR-weighted). The DXY proxy AU traders care about; movements directly translate into AUD/USD pressure.
Chart
Daily trade-weighted broad USD index. Base Jan 2006 = 100. Higher = stronger USD = weaker AUD/USD pressure.
What is the broad USD index?
The Federal Reserve's DTWEXBGS is a daily geometric average of the USD's bilateral exchange rates against 26 currencies, weighted by goods + services trade flows. The series is normalised to January 2006 = 100. A reading of 122 means the USD is 22 percent stronger than its January 2006 value against the trade-weighted basket.
The 26-currency basket captures the actual external value of the USD against the countries the US trades with. Major weights as of recent updates: EUR ~18%, CNY ~13%, MXN ~13%, CAD ~13%, JPY ~6%, KRW ~4%, GBP ~3.5%, INR ~3%, AUD ~3%, plus smaller weights for 17 other currencies.
DXY vs DTWEXBGS comparison
| Attribute | DXY | DTWEXBGS |
|---|---|---|
| Publisher | ICE | Federal Reserve |
| Currency count | 6 | 26 |
| Weights updated | Never (1973 fixed) | Annually |
| EUR weight | 57.6% | ~18% |
| CNY weight | 0% | ~13% |
| AUD included | No | Yes (~3%) |
| Futures-tradable | Yes | No |
| Fed-preferred | No | Yes |
| Use case | Forex futures, ICE-tradable | Macro / policy analysis |
Trader takeaway
- AUD/USD inverse correlation. Broad USD index correlation with AUD/USD is roughly minus 0.85 over multi-year windows. When broad USD rises, AUD/USD falls. Size AUD/USD positions with awareness of the USD trend.
- Commodity-currency channel. AUD is part of the broad index and a 'commodity currency'. When commodity prices fall, AUD weakens and the broad USD strengthens (because the AUD component contributes downward weight to the basket value).
- Risk-off USD bid. Stress events strengthen USD via safe-haven flows. This is asymmetric: small risk-off moves can produce outsized USD gains. AUD/USD shorts are an effective indirect hedge for a long-AUD risk-asset portfolio.
- Bitcoin negative correlation. BTC and broad USD show consistent negative correlation post-2017. Strong USD = weak BTC, weak USD = strong BTC. The 2024 USD weakness phase coincided with BTC strength.
Methodology
- Source. FRED series DTWEXBGS (Trade-Weighted Broad USD Index, Goods + Services).
- Endpoint. Public fredgraph.csv.
- Base. January 2006 = 100.
- Recession shading. NBER-dated US recessions.
- Static-first. Snapshot preserved if FRED unreachable.
Related tools
- Fed Funds Rate - the policy variable driving USD strength.
- 10Y Treasury Yield - the rate-differential input.
- VIX - the risk-off-bid variable.
- AUD/USD Hedging Cost Calculator - the AU-side hedge sizing tool.
Frequently asked questions
The Federal Reserve's Trade-Weighted Broad Dollar Index (DTWEXBGS) is a daily index of the USD's exchange-rate value against a basket of 26 currencies of major US trading partners, weighted by goods + services trade flows. The base is January 2006 = 100. Higher = stronger USD; lower = weaker USD. This is the Fed's preferred USD measure for policy and research because it captures the USD's external value against the actual trading partners that matter.
DXY (US Dollar Index, ICE-traded futures) is a fixed-weight index against six currencies (EUR 57.6%, JPY 13.6%, GBP 11.9%, CAD 9.1%, SEK 4.2%, CHF 3.6%). It dates from 1973 and the weights haven't been updated. DTWEXBGS uses 26 currencies (including AUD, CNY, MXN, KRW, INR, BRL, and others) with trade-share weights updated annually. For analysing the USD against the global economy, DTWEXBGS is far more representative. For pure forex traders, DXY remains the standard futures-tradable benchmark.
The AUD is in the DTWEXBGS basket with about 3 percent weight, so a stronger broad USD typically means a weaker AUD/USD. More importantly: the broad USD reflects US monetary tightness, global risk-off positioning, and structural USD demand. All three are negative for AUD/USD. The 2022 broad-USD spike (from 117 to 129 over 9 months) coincided with AUD/USD dropping from 0.78 to 0.62. The 2024-25 USD softening has been one of the tailwinds behind AUD/USD recovery.
Three primary drivers. (1) US interest-rate differential: when US rates rise faster than other developed-economy rates, the USD strengthens. (2) Risk-off sentiment: USD is the global safe-haven currency, so stress events (banking crises, geopolitical shocks) typically strengthen USD even when US-specific risks are part of the problem. (3) Trade and capital flows: persistent US current-account deficits would normally weaken the USD; the offsetting capital-account surplus (foreign demand for US Treasuries and equities) keeps the dollar elevated.
The data does not support it. DTWEXBGS is up roughly 22 percent since January 2006 (from 100 to ~122 in 2026). The 2024 peak above 130 was the highest level since the early 1990s. Talk of 'USD collapse' has been a recurring theme for 50 years; the actual data shows the USD trade-weighted has been broadly range-bound 100-130 since 2015. The Fed's research consistently shows the USD's reserve-currency status is structurally supported by US capital-market depth, the legal regime, and the absence of viable alternatives.
FRED series DTWEXBGS sources the Federal Reserve H.10 statistical release. The series begins 2 January 2006. Daily values, base January 2006 = 100. The series replaced earlier 'major currencies' and 'broad' dollar indices in 2019 with an updated methodology and is the current Fed standard.
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