What Is Dax40 Index?

The Dax40/Ger40 formerly known as Dax30/Ger30 is an index that consists of the 40 major German blue chip companies that are listed on the Frankfurt Stock Exchange and it measures their performances. The Dax was founded on the 1st of July 1988. It had 30 companies hence it was called Dax30/Ger30. It has since expanded to 40 companies in 2021 and now called the Dax40/Ger40. The addition will give traders and investors an opportunity to gain more exposure to the German financial markets. The Dax40 is considered a strong measure of German and European economic health.

What Is Stock Index Trading?

Stock index trading is when you are trading a basket of stocks which makes up an Index. Stock Index trading is less time consuming as you are not required to study each company. You can trade the Index on your Forex trading platform and do it through an instrument such as the Dax40. I have published blogposts on how to trade Ftse100 and Nasdaq.

Some Of The Companies On Dax40

• BMW.
• Adidas.
• Porsche.
• Puma.
• Airbus.
• Deutsche Bank.
• Siemens.
• Volkswagen.
• Continental.
• Mercedes-Benz Group.

What Economic Factors Influence Dax40?

• Monetary Policy, performance of the companies on the index and geopolitics.

The change in Interest Rates plays a big role in currency valuation. The Release of Interest Rates and Monetary Policy statement by the European Central Bank (ECB) affect the price of Euro. When Euro weakens against USD, Dax40 strengthens because German exports are paid for in USD and they cost more because of the exchange rate. When Euro strengthens, Dax40 falls, they have a negative correlation.

It is very crucial to understand that all financial instruments do not just weaken or strengthen, there’s always a fundamental reason why they react in a certain way. When you have decided to invest your money in the Forex markets, understanding how the markets work should be your priority.

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