Comments on: what is the concept of basket of currency? http://www.myylt.com/2008/05/28/what-is-the-concept-of-basket-of-currency/ Discussion of Forex Trading and Currency Trading Sat, 19 May 2012 12:29:03 +0000 http://wordpress.org/?v=2.3.3 By: oldmarketeer http://www.myylt.com/2008/05/28/what-is-the-concept-of-basket-of-currency/#comment-3798 oldmarketeer Tue, 30 Nov 1999 00:00:00 +0000 http://www.myylt.com/2008/05/28/what-is-the-concept-of-basket-of-currency/#comment-3798 Instead to taking into account only one currency for some calculations, several ones are used. The simple average can be used, or a weighted average, where every currency has a different influence on the result. For example, if you want to reflect the change of the dollar value in front of the country exports, you could use a basket of the currencies of the main exports markets, weighted by their share of total exports. This is not wright nor wrong by itself. It depends from what you will do with the average. Instead to taking into account only one currency for some calculations, several ones are used.

The simple average can be used, or a weighted average, where every currency has a different influence on the result.

For example, if you want to reflect the change of the dollar value in front of the country exports, you could use a basket of the currencies of the main exports markets, weighted by their share of total exports.

This is not wright nor wrong by itself. It depends from what you will do with the average.

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