Q. Consider the following statements:
1.U.S. Dollar Index (DXY) measures the value of the U.S. dollar relative to a basket of foreign currencies.
2.British Pound has the highest weight in the U.S. Dollar Index (DXY).
Which of the statement(s) given above is/are correct?
Answer: A
Notes:
Explanations –
Statement 1 is correct. The U.S. Dollar Index (DXY) measures the value of the U.S. dollar against a basket of six major foreign currencies: the Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona, and Swiss Franc.
Statement 2 is incorrect. The Euro has the highest weight in the U.S. Dollar Index. A rising USDX can lead to higher borrowing costs for emerging markets that rely on dollar-denominated debt.
Source: The Hindu
