Big Mac Index
The Economist publishes a Big Mac Index, which is a guide to how far currencies are from fair value, based on the prices of a Big Mac at McDonalds all over the world. Based on the guide published on July 7th 2007, the Singapore dollar is considered 24% undervalued against the American currency.
This is a little interesting, since the Singapore dollar has appreciated against the American dollar for some time, and the American dollar seems set to continue falling further.
The New Zealand dollar is 73% overvalued against the American dollar. The NZ dollar has increased significantly against the Singapore dollar, so it is quite expensive to buy the NZ dollar. However, as what I have mentioned earlier in another post, it currently offers high-yielding investments in rich countries. Carry traders (using a currency at low interest to buy high-yield currencies.
- Currency which are undervalued against the American dollar
- Argentina
- Australia
- Chilie
- China
- Czech Republic
- Egypt
- Indoneisa
- Japan
- Malaysia
- Mexico
- Peru
- Philippines
- Poland
- Russia
- Singapore
- South Africa
- Thailand
Popularity: 11% [?]
