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Dollar & EM

US Dollar Index & Stablecoin Supply

· Updated daily

As of Jun 2026, the Trade-Weighted US Dollar Index stands at 120.89, classified as Moderately Strong. The dollar has moved +2.04% over the past 30 days and -6.91% year-over-year. DTWEXBGS measures the dollar against a basket of currencies of the major US trading partners, weighted by trade volume, normalised to January 2006 = 100. Broad dollar strength is one of the most important macro variables for stablecoins: when the dollar rises against trading partners, residents of those countries face higher local-currency costs and seek dollar-denominated stores of value, including stablecoins. Conversely, broad dollar weakness typically reflects Fed easing or risk-on conditions, both of which have historically coincided with aggregate stablecoin supply growth. The IMF's Understanding Stablecoins[1] discusses currency substitution and capital-flow volatility as the macrofinancial channels through which dollar strength relates to offshore demand for stablecoin holdings. Source: FRED series DTWEXBGS, daily from Jan 2020.

DXY Level
120.89
as of Jun 2026
30-Day Change
+2.04%
rolling 30-day
1-Year Change
-6.91%
year-over-year
Dollar Regime
Moderately Strong
vs long-run trend

DXY vs Total Stablecoin Supply

DXY index level (right axis, orange) overlaid with total stablecoin market cap (left axis, green, from Jan 2018). Regime bands mark Fed policy periods. Watch for divergence: rising DXY typically coincides with stablecoin contraction, falling DXY with expansion, but the relationship breaks during idiosyncratic dollarization waves in specific EM corridors.

DXY Level Over Time

DXY level alone over the selected period. The 110, 115, 120 reference lines mark historically meaningful thresholds: 110 is the long-run average, 115 is moderately strong, 120+ is historically rare and typically reflects either Fed tightening cycles or global crisis-driven flight-to-quality buying.

How to Read This Chart
DXY > 122
Strong Dollar, Stress Setup

Historically rare territory. Typically reflects an aggressive Fed tightening cycle (2022) or a global flight-to-quality event (March 2020). Strong dollar drains liquidity from EM and pressures crypto. Aggregate stablecoin supply tends to contract; corridor-specific dollarization (Turkey, Argentina) typically accelerates.

DXY 115–122
Moderately Strong Dollar

Above the long-run average. Often coincides with Fed in tightening or hold mode. EM stress elevated. Aggregate stablecoin supply growth tends to slow but not contract. Watch for divergence between major-FX-driven DXY moves (broad trend) and EM-driven moves (dollarization signal).

DXY 108–115
Moderately Weak Dollar

Near or below long-run average. Typically reflects Fed easing expectations or risk-on conditions. Constructive backdrop for stablecoin growth, both the macro liquidity and the relative attractiveness of dollar yields vs DeFi tend to favour expansion.

DXY < 108
Weak Dollar, Risk-On Setup

Historically supportive of crypto and stablecoin growth at the aggregate level. Reflects either active Fed easing, foreign currency strength, or risk-on capital flows leaving USD. EM corridors tend to see slower dollarization demand in this regime as local currencies recover.

Methodology

DTWEXBGS (Trade-Weighted US Dollar Index, Broad, Goods and Services): a daily index measuring the foreign exchange value of the US dollar against a basket of currencies of major US trading partners, weighted by trade volumes. Published by the Federal Reserve, normalised to Jan 2006 = 100. Source: FRED.

vs ICE DXY: The ICE DXY index quoted in financial media uses only 6 currencies fixed in 1973, heavily Euro-weighted (~58%). DTWEXBGS uses a broader basket (~26 currencies) rebalanced annually for current trade flows, making it a more accurate measure of US dollar purchasing power across the global economy. The two indices are correlated but not identical: DTWEXBGS is the academic and policy standard; ICE DXY is the trader convention.

Regime thresholds: <108 weak, 108–115 moderately weak, 115–122 moderately strong, >122 strong. These are not formal definitions but reflect historical operating ranges since 2010. The index averaged ~110 over 2010–2025 with a standard deviation of ~5 points.

Update frequency: Daily. The Fed publishes DTWEXBGS once per business day, typically by 17:00 ET.

What this page does not prove: DXY and USDT dominance can move together without one driving the other, both may respond to a common third variable (risk-off conditions, geopolitical stress, EM capital outflows). The chart shows co-movement consistent with the dollarization-pressure hypothesis but does not establish causation. For direct EM dollarization evidence, central-bank wallet adoption data is the right source.

Related Indicators
Dollar & EM
EM Currency Stress Index
Country-specific complement: when DXY rises, this is which currencies are bearing the depreciation pressure. Useful for attributing broad dollar moves to specific corridors.
Macro Environment
Real Interest Rates
Real rates are one important input into DXY. When US real rates rise relative to other economies, allocation can shift toward USD assets and the dollar tends to strengthen.
Macro Environment
Fed Net Liquidity
When Fed liquidity is contracting, dollar funding stress can rise and DXY has historically tended to strengthen. The balance-sheet-to-dollar channel is one of several macro lenses relevant to stablecoins.
Dollar & EM
Gold vs Dollar
DXY's mirror asset. When DXY rises and gold also rises, broad-based fiat debasement hedging is in play; when DXY rises and gold falls, it's a USD-specific signal.
Dollar & EM
EM Equities
EM equity weakness often accompanies DXY strength. Use to separate dollarization (defensive) flows from broad risk rotation (correlated) flows.
Insight
Oil Shock, Dollar Demand, and the Stablecoin Bid
Case study from the 2024-25 oil shock, how an exogenous DXY catalyst translated into measurable USDT inflows from oil-importing EM economies.
Frequently Asked Questions
What is the DXY broad dollar index?
DXY here refers to the Trade-Weighted US Dollar Index Broad (Goods and Services), FRED series DTWEXBGS. It measures the dollar against a basket of currencies of the major US trading partners, weighted by trade volume. The index is normalised to Jan 2006 = 100. Higher values mean a stronger dollar relative to trading partners. This is the broader version of the more familiar ICE DXY index (which only includes 6 currencies, heavily Euro-weighted).
Why does the dollar index matter for stablecoins?
Dollar strength is one of the most important macro variables for stablecoins. When the dollar strengthens against EM currencies, residents of those countries face higher local-currency costs and increasingly seek dollar-denominated stores of value — including stablecoins. Conversely, broad dollar weakness typically reflects either Fed easing or risk-on conditions, both of which historically have been net positive for total stablecoin supply at the aggregate level. The relationship is not always linear: the channel runs through capital flows, real rates, and EM stress.
What is a "strong" vs "weak" dollar level?
There is no fixed threshold, but DTWEXBGS has averaged around 110–115 over the past decade. The pandemic safe-haven surge took it to ~130 in March 2020. The 2022–2023 Fed hike cycle pushed it to all-time highs around 125. Below 108 is historically weak; above 122 is historically strong; 110–120 is the typical operating range.
How does the dollar index relate to EM currency stress?
Strongly. The Trade-Weighted Broad Index includes many EM currencies (Mexico, Brazil, China, India, Korea), so when the dollar strengthens, these currencies depreciate by definition. The EM Currency Stress Index on this site is essentially a focused subset of the same phenomenon. The dollar index is a useful headline; EM stress provides the corridor-specific detail relevant for stablecoin demand attribution.
What drives the dollar in the short term?
Three main forces: (1) interest rate differentials — when US rates rise faster than other developed economies, capital flows into USD; (2) risk sentiment — global stress drives flight-to-quality buying of USD assets; (3) growth differentials — strong US relative GDP makes USD assets more attractive. The Fed funds rate is the most-watched proximate driver but rate differentials with EUR/JPY/GBP also matter.
Why use the broad index rather than the ICE DXY?
The ICE DXY index (the one quoted in financial news as "the dollar index") is heavily Euro-weighted (~58%) and has not been rebalanced since 1973. It does not reflect modern US trade patterns. The Trade-Weighted Broad Index includes a more representative basket of trading partners updated annually for trade flows, making it a more accurate measure of the dollar's purchasing power in the global economy.
Sources & Citations
  1. Adrian, Tobias, Parma Bains, Marianne Bechara, et al. 2025. "Understanding Stablecoins." IMF Departmental Paper No. 2025/009, International Monetary Fund. imf.org/en/publications/departmental-papers/issues/2025/12/02/understanding-stablecoins-570602