Dollar index and its relevance in current times

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Dollar index components.

DXY_Components

Euro carries the maximum weightage with 57.6%, Japan having 13.6%, GB Pound having 11.9%, Canadian Dollar 9.1% !!, Swedish Krona and Swiss franc at 4 and 3% respectively.

Dollar index is supposed to represent some of the biggest trading partners of America. But this index since its inception in 1973 has been updated only once. That too in 1999.

World was different back then. It’s tough to leave out major global power like China and rising economies like India in current times.

If we look at Dollar Index, There’s no china, India and other Asian countries except Japan. No Russia, middle east, Africa, South America or Australia.

I wonder how relevant this index is anymore. I think we should either have a better version of Dollar index to cover all the major developed and Emerging economies or have a different benchmark altogether.

Would love to hear your thoughts on this topic.

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Here’s the list of top 10 trading partners of USA (2021)

US_Tradepartners
US_Tradepartners838×405 69.5 KB

~ Nearly 85% of the trade is done with the top 10 nations and (4011 Billion out of 4700) and out of that, only 45% of the top 10 trading partner currencies are captured in the present Dollar index.

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So, we won’t be able to see actual data when the dollar collapses? As most of the currency is in euros, the dollar index wouldn’t decline significantly. will this means USDINR @ 70 And CADINR @ 75 ?

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AFAIK, Dollar Index is supposed to measure currency strength relatively.
So essentially, the index has to be built against major economies and not trading partners.
So, Yuan & Rupee missing is odd, but it should not be trading partners.