Trade Weighted Index

A trade weighted index is an average of the exchange rates of a country's currency with the currencies of its most important trading partners, weighted to reflect each trading partners' importance to the country's trade. A currency's trade weighted index is also known as its effective exchange rate. The currencies in the U.S. dollar index are the euro, the yen, sterling, the Canadian dollar, the Swedish crown and the Swiss franc. It was launched in 1973 with a value of 100.00.

See also: https://www.theice.com/publicdocs/ICE_USDX_Brochure.pdf, https://www.theice.com/usdx.