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USDCAD TECHS

Heading South

AUDUSD TECHS

Northbound

EURJPY TECHS

Breaches Key Short-Term Support

US TSYS

Late SOFR/Treasury Option Trade

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FOREX
  • The chart below ranks the major G9 and CEE currencies based on their percentage difference between the current spot rate and their 'fair' value, using the ‘Big Mac Index’ (BMI) approach (Jan 2022 updates) popularized by the Economist in 1986.
  • Given that Big Macs are sold universally, we can imply an exchange rate depending on how expensive/ cheap are the big macs sold in different countries. It follows the Law of One Price:
    • “In an efficient market all identical goods must have only one price".
  • HUF, JPY and PLN are the most ‘undervalued’ currencies among the G10+CEE world, by -46.8%, -41.7% and -40.8%, respectively, against the US Dollar.
  • CHF remains the most ‘expensive' currency based on that approach, overvalued by 20.2%, followed by NOK, which appears 10% ‘overvalued against the greenback.
  • AUD and NZD are also strongly 'undervalued' (by more than 20%) using the BMI approach.

Source: Bloomberg/MNI.

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