It seems an easy question to answer: Is the dollar up or down? Sometimes the answer is “both,” depending on which yardstick you use. Bloomberg, the owner of this magazine, has a new dollar index that it claims is better than the best-known benchmark.

Bloomberg is challenging IntercontinentalExchange, better-known on Wall Street as ICE, which publishes the U.S. Dollar Index. ICE bills its U.S. Dollar Index—correctly—as “the most widely recognized benchmark for the value of the U.S. dollar.” It’s the basis for a range of futures and options traded on ICE.

Bloomberg, on the other hand, says its Bloomberg U.S. Dollar Index, unveiled in late October, includes “leading U.S. trading partners from emerging markets such as China, South Korea and Mexico, as well as the highly liquid Australian dollar, which are absent from other existing benchmarks.”

I created a chart of the two indexes and found that they track each other pretty closely. Still, gaps do open. For example, on Oct. 22, ICE’s dollar index was down 0.7 percent for the year, while Bloomberg’s was up 1.4 percent. Confusing, huh? A man with one watch always knows what time it is. A man with two is never quite sure.

Bloomberg's new dollar index tracks ICE's U.S. Dollar Index fairly closely
Bloomberg's new dollar index tracks ICE's U.S. Dollar Index fairly closely
Data: Bloomberg

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