often makes the mistake of considering a currency the "weak" if the exchange rate with the euro rises beyond a certain level technicians (eg EURUSD at 1.50 ). In reality the strength of a currency must be considered in relation to a basket of other currencies weighted by the weight of "commercial" that individual nations have with respect to the reference country, for example the United States.
In an attempt to formulate a more accurate measure of the strength of a coin has been created on the nominal effective exchange rate, which is nothing more than an average of bilateral nominal exchange rate, weighted with weights chosen appropriately.
If an importer to buy dollars to pay for importing raw materials or a tourist buys pounds to fund their trip (which will purchase goods and services) come into play, not only exchange rates but also the prices of goods and services traded Two key elements in determining the value and then in most cases, the choice of buying or journey's end.
In this regard it is useful to have a rate effective exchange rate that takes into account also the effect of prices and that is not defined as the relative price between two currencies, but between two sets of goods, this tool is the real effective exchange rate appreciation which may be linked to raising domestic prices to lower prices and the revaluation of foreign exchange.
Without this premise, the table at the side allows us to understand the dynamics of the real effective exchange rates of major world currencies, comparing the present value of regularly provided by the BIS (Bank for International Settlements) average over the past 3 and 10 years.
Negative values \u200b\u200bexpressing a depreciation of the real exchange rate compared to historical averages, and then a "good At currency "for a foreigner who has to travel / purchase in that geographical area, this is because the valutta be at a discount to their long-term average values.
To give a concrete example the U.S. dollar is now below 8.6% over its ten year average and nearly in line (-0.49%), with its average of 3 years.
expanding the horizon to the world as we see, today, the more depreciation than historical averages to 10 years are charged to the Argentine Peso (-35%), the Icelandic Krona (-31%), the British pound ( -16%), Mexican Peso (-16%), South Korean Won (-16%), Hong Kong Dollar (-14%) and the Crown Sweden (-13%). They appreciate the fact that for nearly all distances in these currencies are also relatively high compared to historical averages to 3 years.
On the opposite side, or the real effective exchange rates that were most appreciated by historical average, there is the Brazilian real (+30%), the Russian ruble (+21%), the Czech crown (+24%), the Hungarian forint (+15%), whole block of currencies Baltic (Estonia, Lithuania, Latvia) apprezzatesi an average of 15% and finally the Australian dollar (+10%).
In an attempt to formulate a more accurate measure of the strength of a coin has been created on the nominal effective exchange rate, which is nothing more than an average of bilateral nominal exchange rate, weighted with weights chosen appropriately.
If an importer to buy dollars to pay for importing raw materials or a tourist buys pounds to fund their trip (which will purchase goods and services) come into play, not only exchange rates but also the prices of goods and services traded Two key elements in determining the value and then in most cases, the choice of buying or journey's end.
In this regard it is useful to have a rate effective exchange rate that takes into account also the effect of prices and that is not defined as the relative price between two currencies, but between two sets of goods, this tool is the real effective exchange rate appreciation which may be linked to raising domestic prices to lower prices and the revaluation of foreign exchange.
Without this premise, the table at the side allows us to understand the dynamics of the real effective exchange rates of major world currencies, comparing the present value of regularly provided by the BIS (Bank for International Settlements) average over the past 3 and 10 years.
Negative values \u200b\u200bexpressing a depreciation of the real exchange rate compared to historical averages, and then a "good At currency "for a foreigner who has to travel / purchase in that geographical area, this is because the valutta be at a discount to their long-term average values.
To give a concrete example the U.S. dollar is now below 8.6% over its ten year average and nearly in line (-0.49%), with its average of 3 years.
expanding the horizon to the world as we see, today, the more depreciation than historical averages to 10 years are charged to the Argentine Peso (-35%), the Icelandic Krona (-31%), the British pound ( -16%), Mexican Peso (-16%), South Korean Won (-16%), Hong Kong Dollar (-14%) and the Crown Sweden (-13%). They appreciate the fact that for nearly all distances in these currencies are also relatively high compared to historical averages to 3 years.
On the opposite side, or the real effective exchange rates that were most appreciated by historical average, there is the Brazilian real (+30%), the Russian ruble (+21%), the Czech crown (+24%), the Hungarian forint (+15%), whole block of currencies Baltic (Estonia, Lithuania, Latvia) apprezzatesi an average of 15% and finally the Australian dollar (+10%).
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