In March 2020, the dollar index rose to its highest level in eighteen years since 2002. The move to a high of 103.96 came during a risk-off period and a flight to quality during the early days of the spread of the global pandemic to Europe and the United States. Since then, the dollar declined, reaching its latest low on September 1 at 91.750 on the nearby December futures contract. In under six months, the world’s reserve currency fell by 11.7%.
The dollar index futures contract trades on the Intercontinental Exchange. It measures the value of the Us currency against other leading reserve currencies. Since central banks worldwide hold dollars and euros as the primary foreign exchange instruments, the dollar index has a 57.6% exposure to the European currency. Governments, central banks, and monetary authorities worldwide manage the currency markets to stabilize the global financial system. The 11.7% move in