Trade-Weighted Dollar Index (TWEX)
FRED Trade-Weighted Dollar Index across a 26-currency basket (TWEXBGSMTH broad nominal). A multilateral measure of dollar strength versus key trading partners.
What is it?
The Trade-Weighted Dollar Index (TWEXBGSMTH) is a Federal Reserve construct that measures the U.S. dollar against a basket of 26 currencies of major U.S. trading partners, weighted by their trade volume. Unlike the popular DXY (which weights only six currencies, with EUR dominating at 57.6%), TWEX provides a true multilateral measure of dollar strength. The 'BGS' in the series name stands for 'Broad, Goods, Spot' — the broadest, most representative measure of dollar value.
How to read
Higher values indicate dollar strength relative to the basket; lower values indicate dollar weakness. TWEX is more accurate than DXY for assessing the global purchasing power of the dollar and the macro pressure on emerging markets and U.S. multinationals. When TWEX rises sharply, emerging market debt and commodity prices come under pressure (commodities priced in USD become more expensive in local currency). When TWEX falls, the inverse holds.
Key zones
• Above 130: Extreme dollar strength regime, EM stress likely • 115-130: Strong dollar, headwind for non-USD assets • 100-115: Moderate strength • 90-100: Moderate weakness • Below 90: Weak dollar regime, tailwind for non-USD assets including alternatives
What to observe
• Sustained TWEX rise alongside Fed hiking: classic dollar strength regime • TWEX divergence with DXY (TWEX rising, DXY falling): EUR-driven DXY moves vs broader dollar moves • TWEX collapsing alongside Fed pivot expectations: dollar weakness regime begins • TWEX at multi-year extremes: structural inflection points, watch for EM and commodity implications • TWEX peaks coinciding with EM crises: 2002 emerging market stress, 2015 commodity collapse, 2022 EM debt stress
Historical context
TWEX peaked near 128 in late 2022 during the Fed's aggressive 2022 hiking cycle, the highest level in two decades. It bottomed near 88 during the 2011-2014 weak-dollar regime that coincided with the commodity supercycle peak. The 2014-2016 dollar surge alongside the end of QE3 caused widespread emerging market and commodity stress. Long-term, TWEX has shown a structural uptrend since the 2008 financial crisis as the dollar regained reserve currency credibility.
Expert notes
TWEX is the Fed's preferred dollar metric and is more representative than DXY for global macro analysis. The 'broad' index includes emerging market currencies (yuan, Mexican peso, Korean won) which are absent from DXY. Use TWEX for multilateral dollar analysis and DXY for major-currency analysis. Both are inputs to the Trinity Yield Curve Composite (TYCC) and Trinity Carry Trade Detection.
Common mistakes to avoid
• 'TWEX = DXY' — Different baskets, different weightings, different readings. • 'High TWEX = automatic dollar dominance forever' — Dollar regimes have lasted 7-10 years historically; mean reversion is likely over multi-year horizons. • 'TWEX up always = risk-off' — Not always. In rate-divergence regimes, dollar strength can coincide with rising risk assets (e.g., 2014-2015 U.S. equity rally + dollar surge).
Programmatic access
REST API
curl -sS \
'https://api.trinityinsights.io/api/v1/macro-intelligence/macro-v2-trade-weighted-dollar-index/history?days=90' \
-H 'X-API-Key: $TRINITY_API_KEY'MCP server
{
"tool": "get_chart_value",
"metric_id": "macro-v2-trade-weighted-dollar-index",
"timeframe": "1y"
}Required tier: pro. See the pricing grid for the tier list and the MCP documentation for multi-client configuration.
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Institutional disclaimer
Trinity Insights is an educational and analytical tool. The metric above does not constitute investment advice. Trinity Insights is not a Crypto-Asset Service Provider (CASP) registered under MiCA Regulation (EU) 2023/1114. See the full disclaimer.