Part II. Dollar Index – continued… Commander in Pips: Along with the ICE Index, there is another one that exists – the Federal Reserve index. It was started in 1998 and represents a more weighted view on US dollar value. In the calculation of the Fed Reserve Index are many more currencies take part. The weight of each currency is reassesses much more frequently than in the ICE index. This index is called the “Trade-weighted Index”, because it based on export-import value of American goods. Weights are based on Import and Export value of US goods with a particular country. The algorithm of weights appointment is a bit complicated, but if you want to know it, be my guest: http://www.federalreserve.gov/pubs/bulletin/2005/winter05_index.pdf “Trade-weighted Index” So, here is a table of Index for 2012 (as of October 2011): Historical weights and more information about this index you can find here: FRB: H.10 Release--Currency Weights FRB: H.10 Release--Currency Weights In fact this index is based on the competitive quality of US goods. The major difference with the ICE index, is that the current one includes more countries in calculation, even some emerging countries. Probably it better reflects the real value of the US dollar in the modern financial world, especially if we will take into consideration the growing power of emerging markets.