19.09.2019

Index is a rate that makes it possible to evaluate the state of Forex market. There are 3 main indices:

1. DJI.
2. S&P 500.
3. DXY (USDX).

They are the most important ones. They can be effectively used for analysis in combination with some other instruments. Let’s look at these indices more detailed.

DJI

This abbreviation stands for Dow Jones Index. It was created by Charles Dow, the Dow Jones and Company founder. This index was developed for monitoring the development of the industrial component of the American stock market. DJI is one of the oldest one among the indices existing nowadays.

It was published for the first time on the 26th of May in 1896. At that time, it was the average for prices of 12 American industrial companies’ shares. Only one of these 12 companies is included into today’s version of this index. This is General Electric. In 1916, the number of corporations was increased to 20, and in 1928 – up to 30.

Nowadays this index includes not only industrial corporations’ shares prices.

Depending on the market conditions, the DJI components are sometimes changed. The choice of components is made by the Wall Street Journal publishers. In the process of company replacement, the index is being corrected. So, its average rate is not significantly changed after this.

S&P 500

This is the index consisting of 500 American corporations with the biggest capitalization. Standard & Poor’s creates and owns the list of companies. The shares of the corporations from the S&P 500 list are traded on the biggest stock markets, such as:

• NASDAQ;
• New York Stock Exchange.

Sometimes this index is called the barometer of American economy.

DXY (USDX)

This is the ratio of US Dollar to the package of 6 main currencies:

1. Euro;
2. Ian;
3. Great Britain Pound.
4. Canadian dollar.
5. Swedish krona.
6. Swiss frank.

This index shows the value of American currency.

Other indices

There are a lot of other ones. Some of them are:

• DAX 30 – the main German one, which is calculated with taking into account of prices of shares of 30 top companies from different spheres of this country’s economy.
• Nikkei – a popular Japanese index.
• CAC 40 and CAC General – French indices.
• Hang Seng – the Hong Kong one formed on the basis of 33 companies’ shares value.
• Bovespa – a Brazilian index, that includes the most liquid shares from this country traded on the Sao Paulo Stock Exchange.