|The EURB Index Explained||
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:
and i is one of (weights are based on IMF data on country GDPs for 2010):
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
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We plan to implement the following: