US Dollar

Written by Mike Druttman

Reviewed by Wikitoro Team

What You Need to Know

The US Dollar Index (DXY, USDX, USDOLLAR) is a crucial tool for traders aiming to assess the value of the US dollar against a basket of major currencies used by its trading partners. This index reflects the dollar's strength or weakness relative to six foreign currencies based on their exchange rates. A rising index indicates a strengthening US dollar, while a falling index suggests it's weakening. For those interested in trading this specific investment product, it's available on the eToro platform. This guide offers detailed insights and personal experiences on how to invest in this intriguing asset on eToro, so keep reading for valuable information.

Trading US Dollar via CFD

It's important to understand that trading the US Dollar Index on eToro involves CFDs (Contracts for Difference), not direct stock exchange trading. CFD trading is appealing due to its speculative nature on the indices market movements. CFDs allow traders to profit from price fluctuations without owning the underlying asset. The value of a CFD contract is based on the price difference between when the trade is entered and exited. With skillful execution, CFDs can yield a Return on Investment (ROI) regardless of market direction. Crypto CFDs/ Leverage trading is restricted for users under FCA.  

Why I Prefer Trading US Dollar on eToro

Having traded this asset on eToro on multiple occasions, I've identified several key advantages:

• User-friendly interface: eToro's platform is intuitive and easy to navigate.
• Flexibility in scheduling: The platform allows setting pre-orders even when the market is closed.
• Leverage options: eToro provides leverage, enabling traders to open larger positions with a smaller capital commitment. Note that leverage limits vary based on your country of residence.

The US Dollar Asset Page on eToro

When you access the US Dollar asset page on eToro, you'll land on the Overview section, which serves as the default hub for several key features:

• Graph: Displays the asset's performance through a basic graph. A more detailed graph is available in another tab.
• About: Provides brief information about the index.
• Latest News: Offers current news relevant to the US Dollar, sourced from CityFALCON.
• People Also Bought: Shows other popular eToro indices that traders are investing in.
• Copy Investors: Lists top-performing traders focused on this index. Click the "Copy" button next to a trader to engage in copy trading.
• Discussions: Features posts and conversations about the US Dollar. You can filter to see top discussions or all discussions, similar to social media platforms like Facebook and Twitter, where you can like, comment, or share posts.

Useful Index Trading Tools on eToro

The integrated tools on eToro's platform streamline the trading experience, eliminating the need to switch between apps or screens. Notable tools include:

• Chart: An advanced live chart for the US Dollar, customizable to display intervals from 1 minute to 1 week.
• News and Sentiment Trends: Shows the latest news about the US Dollar, also powered by CityFALCON, indicating the news mood (positive, negative, or neutral). The Sentiment Trends section quantifies the general sentiment about the topic, displaying a 30-day average sentiment along with daily sentiment scores and top stories.

Trading the US Dollar on eToro

To trade this index on eToro, search for the underlying asset, select "BUY" or "SELL", input your investment amount, set your trading preferences, and execute the trade.

Maximizing Your eToro Experience

To effectively invest in the US Dollar index on eToro, it's crucial to understand the platform's features and tools. These insights apply to both the web-based platform and the mobile app. Remember to apply these tips judiciously in your trading activities and enjoy the comprehensive experience that eToro offers!