Cocoa: Korean Messenger launches Klip
The latest Big Mac index, published by the very serious weekly british The Economist, tends to show that most currencies of the world are under-valued relativ

The Big Mac highlights the overvaluation of the dollar

The latest Big Mac index, published by the very serious weekly british The Economist, tends to show that most currencies of the world are under-valued relativ

The Big Mac highlights the overvaluation of the dollar

The latest Big Mac index, published by the very serious weekly british The Economist, tends to show that most currencies of the world are under-valued relative to the u.s. dollar, which dominates both the developed and emerging markets.

" READ ALSO - The Big Mac celebrates 50 years of success

The Big Mac index was invented for the first time in 1986 for the purpose of determining whether currencies are at their level "correct". It is based on the theory of purchasing power parity, according to which the foreign currency should adjust until the price of a basket of goods that is identical - or in this case of the famous burger from Mcdonald's costs the same in all the countries of the globe. The Big Mac, which is composed of the same ingredients and produced in a manner substantially identical in all restaurants of the chain, represents an element of measurement particularly coherent.

The Russian ruble undervalued by 70% compared to the dollar

This element allows us to see that this year, the dollar appears to be even stronger than in the previous publication of the index, in July 2018, while the greenback was already expensive compared to other currencies. According to the latest publication of The Economist almost all the currencies are undervalued against the dollar. It turns out that in Russia, a Big Mac costs 110 rubles ($1.65), compared to 5,58 dollars in the United States. The price difference is considerable, suggests that the ruble is undervalued by 70% relative to the u.s. dollar. In Great Britain the burger is 27% cheaper than in the USA and it is 35% cheaper in Argentina. The index also shows you that the euro is undervalued by 17% against the dollar. Only the swiss franc, the Norwegian krone and the Swedish krona are considered to be overvalued.

The calculation of this index is not only fun for students of economics and their teachers. It is a valuable indicator for the traders who intervene on the foreign exchange market.

Publish Date : 12 Ocak 2019 Cumartesi 00:00

Breaking News Headlines

New Methods in Forex Trading
New Methods in Forex Trading
How to Follow the “3 Hobbies” Principle for Poker Players
How to Follow the “3 Hobbies” Principle for Poker Players
One Way Backlink from News Sites for Forex Companies
One Way Backlink from News Sites for Forex Companies
Forex Brokers you can Deposit via Paypal
Forex Brokers you can Deposit via Paypal
What time do they close the bars, pubs and clubs in each autonomous community?
What time do they close the bars, pubs and clubs in each autonomous community?
One out of every five self-employed have at least one worker in their charge
One out of every five self-employed have at least one worker in their charge
19% of british companies that cut their earnings forecasts cited Brexit
19% of british companies that cut their earnings forecasts cited Brexit
Employment estimated that only one out of every three contracts to support entrepreneurs to survive in the present
Employment estimated that only one out of every three contracts to support entrepreneurs to survive in the present
The aircraft deliveries of Boeing recorded in July, its worst level since November 2008 for the 737 MAX
The aircraft deliveries of Boeing recorded in July, its worst level since November 2008 for the 737 MAX
In spite of the crisis in the case of Media Markt & Saturn: mother-to-group makes large profit
In spite of the crisis in the case of Media Markt & Saturn: mother-to-group makes large profit
Tug-of-war to Metro: trade group rejects billion Takeover
Tug-of-war to Metro: trade group rejects billion Takeover
Bitcoin price under $ 10,000: crypto-Scam to blame?
Bitcoin price under $ 10,000: crypto-Scam to blame?
Pages
NEWS ARCHIVES