Retail foreign exchange (forex) broker AxiTrader announced this Monday that it has launched ten new trading products on its platform, which include commodities, stocks, and the United States dollar (USD) index.
The Dollar index (USDINDEX.fs) is the measure of the USD’s strength against not one, but a number of other currencies. It is a trade-weighted index, with the EUR/USD currency pair taking up the largest portion of the index (57.6 percent), followed by the JPY at 13.6 percent and GBP at 11.9 percent.
Trading the Dollar index is an alternative for investors who want to speculate on the movement of the USD but don’t have a specific currency pair in mind or want to reduce their exposure from another currency.
“For example, a trader might expect an increase of the US Dollar in the short-term. Instead of picking a specific currency pair – such as GBP/USD which could be heavily affected by e.g. major Brexit developments – he/she may decide to trade the Dollar Index,” the statement said.
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“While the Dollar Index would also be affected by any sudden moves in the British Pound, the impact would be significantly lower than on GBP/USD, as the British Pound only has a 12 % weighting.”
AxiTrader Launches Commodity and Stock Indices
Other trading products launched by the broker this Monday include Gold.fs and Silver.fs, as well as a number of stock indices. Through AxiTrader, investors can also trade the CBOE Volatility Index.
This index, which is commonly referred to as the “fear index” is a measure of the expected volatility implied by S&P 500 index options. Depending on where the VIX is trading, it signals whether investors are calm or are bracing for higher volatility.
Specifically, when the index is trading below 30, this means that investors don’t expect high volatility, and therefore, a reading above 30 could indicate that investors are expecting volatile markets in the short-term.