Rand isn t world s most undervalued currency any more. It should trade at R6/$, index shows Business Insider SA
facebook
email
The Economist s Big Mac index shows that - theoretically - the rand should be trading at R5.92/dollar.
The currency is undervalued by 62% against the dollar, compared to currencies in Brazil (-30%) and India (-54%).
But six months ago, it was undervalued by even more – and it was also the world’s most undervalued currency. Now currencies in Russia and Turkey fare worse.
For more articles, go to
.
Since 1986, the publication has been using McDonald’s Big Mac prices to determine whether currencies are overvalued, or too cheap.
The dollar and yen came under pressure today after rallying yesterday. A bullish sentiment global stock markets has boosted other currencies, particularly the dollar bloc and other cyclical units..
XE Market Analysis: Europe - Jan 19, 2021
The dollar has dropped today after rallying yesterday. A bullish sentiment on Asian stock markets boosted other currencies, particularly the dollar bloc and other cyclical units. The MSCI Asia-Pacific index rose over 1.5% to within a few pips of record highs. U.S. index futures rallied by over 0.5%. Commodities, in contrast, were lacklustre. Oil prices lifted moderately, rising above Monday s highs, but remained off the 11-month highs that were pegged last week. Base metal prices were mixed. The DXY dollar index dropped below yesterday s low to a nadir at 90.57. The index had yesterday printed a one-month high at 90.95. The dollar s recent correlation with U.S. Treasury yields broke, with the currency declining despite a concurrent 2 bp lift in the the 10-year T-note yield to levels back above 1.10%. After rising on every trading day, except one, since January 6th, the dollar had perhaps been looking ripe for a correction. Ex Fed chair Janet