Relative Value Of Currencies

The latest iteration of the Big Mac Index is in the latest Economist New Zealand isn’t featured but at current exchange rates a Big Mac in New Zealand costs around US$2.50.  This puts us back as aa currency well undervaalued when compared to the US$.  As recently as July we were seen as slightly overvalued on this index. 

The Swiss should, I think, take note of the strength of their currency.  I am very worried about the competitiveness of their economy.  Last February I recall the Big Mac index showed that Iceland had the world’s most overvalued currency.  What has happened to Iceland since then???


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