The U.S. Dollar Index is built around a small group of major currencies that reflect America’s strongest trading partners at the time the index was created. The basket has six currencies, and each one carries a different weight. The euro holds the largest share by a wide margin. It makes up more than half of the index because it represents several European economies that trade heavily with the United States. Movements in the euro often have the biggest influence on the index.

The Japanese yen is the second most important currency in the basket. Japan’s close financial ties with the United States and the yen’s role in global markets make it a key driver. The British pound also plays a notable part, reflecting the long-standing economic relationship between the United States and the United Kingdom.

The Canadian dollar is included because Canada is one of America’s largest trading partners, especially in energy and manufacturing. The Swedish krona and Swiss franc round out the list. Their weight is smaller, but they help capture broader European exchange rate dynamics.

While the basket has remained mostly unchanged for decades, many analysts believe it no longer reflects current global trade patterns. The index does not include major currencies like the Chinese yuan or the Mexican peso. Even so, traders rely on the current basket because it provides a long historical record and remains widely used for tracking dollar strength across global markets.