How to get the "pure value" of a currency?
I would like to do some data analysis and find out how news and tweets influence markets. I would like to begin by investigating how USD does change according to news and various events. But is there any general currency value?
When I am looking for USD rate I get USD/EURO or USD/CHF.
Is it possible to get pure Dollar value to find out only how USD does change not influenced by other markets? Should I use USD/XAU?
Can I use CHF as a base? (it is very stable and doesn't change almost at all) Or something else? (Gold or whatever else?)
EDIT Or maybe US Dollar Index? (DXY)
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Imagine a group of boats bobbing up and down on the waves. You want to work out if your boat is going up or down. But all you have to compare it against are the other boats, that are also bobbing up and down. There's no fixed reference you can compare anything against.
You can compare the USD against the EUR or CHF, but that assumes the other currencies are fixed, which they aren't.
You can compare the USD against gold, but gold goes up and down in value*. the same goes for oil or other commodities.
You could compare the USD against a loaf of bread, but that won't help if there's a wheat shortage.
Probably the least worst option is to compare the USD against a whole basket of other things (currencies, commodities, or anything else you can get accurate prices for on a daily basis). But even that could be scuppered by a global recession that upsets everything.
(* whatever the gold bugs say)
Use a USD index created against a weighted basket of currencies, e.g fred.stlouisfed.org/series/DTWEXM
"Value" is defined by how much of something else something is "equivalent" to. So the value of a dollar is meaningless except in comparison to something else. If you don't want to compare it to other currencies, an option would be the Consumer Price Index. This metric takes a "basket of goods", and looks at how much the price of that basket changes. The larger the CPI, the weaker the dollar.
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