The index represents the difference between the US securities purchase by foreign investors and the purchase of foreign long-term securities by American investors.
This is the balance between domestic and foreign investments. For example if foreign investors purchase $100 billion of American shares and bonds while American investors purchase $30 billion of foreign shares and bonds, the index value will be at the level of $70.0 billion.
Effect of market
As a rule it has a significant influence on the market but it varies from month to month.
The positive balance growth reflects the capital inflow into the country, making it favorable for the Dollar.