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Big Mac Index | OANDA

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Big Mac Index


How Far from Fair Value is Your Currency?
The Economist's Big Mac Index (July 28th, 2011 Big Mac prices) valued at today's exchange Country Big Mac Price in Local Currency $ 4.07 Peso 20.0 A$ 4.56 Real 9.50 2.39 C$ 4.73 Peso 1850 Yuan 14.7 Peso 8400 Koruna 69.3 DK 28.5 Pound 14.1 3.44 HK$ 15.1 Forint 760 Rupee 84.0 Rupiah 22534 Shekel 15.9 320 Ringgit 7.20 Peso 32.0 NZ$ 5.10 Kroner 45.0 Rupee 205 New Sol 10.0 Peso 118 Zloty 8.63 Rouble 75.0 Riyal 10.0 S\$ 4.41 Rand 19.45 Won 3700 SKr 48.4 SFr 6.5 NT$ 75.0 Baht 70.0 Lire 6.5
Implied PPP rate + Today's Exchange Rate 1 USD =

in US dollars 4.0700 4.6848 4.5450 5.0900 3.7181 4.5824 3.5265 2.3051 4.1897 3.6022 5.1094 2.3244 4.5873 1.9376 3.2739 1.6073 2.4540 4.1974 4.1051 2.2396 2.2860 3.8677 7.6523 2.2995 3.6134 2.6938 2.5399 2.3935 2.6661 3.3960 2.3252 3.2057 6.9849 7.0552 2.4638 2.2330 3.5025 --4.92 1.12 2.34 0.59 1.16 455 3.60 2066 17.1 7.01 3.47 1.18 3.71 187 20.7 5543 3.91 78.7 1.77 7.87 1.25 11.1 50.5 2.46 29.0 2.12 18.5 2.46 1.08 4.78 910 11.9 1.60 18.5 17.2 1.60

United States Argentina Australia Brazil Britain Canada Chile China Colombia Czech Republic Denmark Egypt Euro area Hong Kong Hungary India Indonesia Israel Japan Malaysia Mexico New Zealand Norway Pakistan Peru Philippines Poland Russia Saudi Arabia Singapore South Africa South Korea Sweden Switzerland Taiwan Thailand Turkey

1.0000 4.2691 1.0033 1.8664 0.6428 1.0322 524.600 6.3773 2004.94 19.2381 5.5779 6.0661 0.7499 7.7932 232.141 52.2625 9182.74 3.7881 77.9522 3.2148 13.9980 1.3186 5.8806 89.1500 2.7675 43.8036 3.3978 31.3347 3.7508 1.2986 8.3648 1154.20 6.9292 0.9213 30.4405 31.3478 1.8558

http://www.oanda.com/currency/big-mac-index

30-11-2011

Big Mac Index | OANDA

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+ The Purchasing Power Parity (PPP) rate is the local Big Mac price divided by its price in the United States. Prices and their corresponding implied PPP rates are the lates The Economist. ++ The Over/Under valuation against the dollar is calculated as follows using OANDA's latest rates: 100 x (PPP - Exchange Rate) / Exchange Rate

What is the Big Mac Index?

The Economist uses the price of the ubiquitous McDonald's meal to calculate the "Big Mac Index", a guide showing how value different world currencies are. The Big Mac theory (a.k.a. purchasing-power parity, or PPP) says that exchange even out the prices of Big Macs sold across the world.

The implied PPP shown in the table is the exchange rate that would make a Big Mac cost the same abroad as it does i When you compare actual exchange rates with the implied PPP rate, you will see that most currencies are trading the US dollar, meaning that they are over- or undervalued. Keep in mind that PPP is a long-term indicator, pointing to w ought to go in the future. (It's also best to use it only to measure currencies between countries that are at a similar stag development.)

How to read this table

If a Big Mac costs 3.38 in countries that use the euro and $3.73 in the US, then the implied PPP rate is 3.38/3.73 = 0. exchange rate for the euro is lower that the implied PPP rate, the Big Mac theory suggests that the value of the euro m reaches the implied PPP rate. If the actual exchange rate is higher, then you might expect the euro to go down until it h PPP rate. The percentage of under- and over-valuation from the current exchange rate is shown in the table.

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http://www.oanda.com/currency/big-mac-index

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Big Mac Index | OANDA

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http://www.oanda.com/currency/big-mac-index

30-11-2011