We propose the Euro vs. Basket Index (EURB) as a measure of the value of Euro relative to a basket of currencies. EURB is meant to reflect the "state of health" of the Euro currency. Fluctuations in exchange rates against each of the selected currencies is taken into account, adjusted by currency "weights": ratio of GDP of respective countries to the total GDP of the selected countries.

The EURB formula is:

Where:

• R_i  is the price of 1 Euro in currency i
• R_i0  is the the price of 1 Euro in currency i at the reference point, which is the official ECB rate as of Nov 11th, 2011
• GDP_i  is GDP of country i
• GDP_total  is the sum of GDPs of selected countries

and i is one of (weights are based on IMF data on country GDPs for 2010):

• USD - US Dollar, weight: 41.47%
• CNY - Chinese Yuan, weight: 16.78%
• JPY - Japanese Yen, weight: 15.58%
• GBP - British Pound, weight: 6.42%
• BRL - Brazil Real, weight: 5.96%
• CAD - Canadian Dollar, weight: 4.5%
• RUB - Russian Ruble, weight: 4.22%
• AUD - Australian Dollar, weight: 3.53%
• CHF - Swiss Franc, weight: 1.5%

The resulting EURB value is multiplied by 10,000 for convenience. Because the chosen reference point is the official ECB exchange rates on Nov 11th, 2011, the EURB index on that day was exactly 10,000.

Currently the EURB index is updated on a daily basis during business days, once the official rates are published by the European Central Bank. Real time calculation and display based on Forex data is planned for the future.

NOTE: the formula was first published on this web site on Jan 23, 2012. The weights will be updated once a year according to new GDP data.

TRENDS.EU was designed, developed and is currently maintained by Hovik Melikyan

Comments, suggestions, contributions are welcome (see the contact link at the bottom of the page).

We plan to implement the following:

• Allow visitors to vote on whether the euro will strenghten or weaken in the near future; based on the hits and misses, ranking will be maintained for each user
• Carefully selected news feed on markets, economy and politics; possibly allow to vote on articles to see if each of them is good or bad news for euro
• Discussion boards (with notifications, etc)
• E-mail alerts for exchange rates