Friday, June 10, 2005

Fast food as currency indicator

The Economist's 'Big Mac Index' compares the worldwide prices of a Big Mac to the US price to analyze currency exchange rates. This year's index indicates that the Euro is overvalued by 17% against the dollar:
"The euro is worth about $1.22 on the foreign-exchange markets. A Big Mac costs €2.92, on average, in the euro zone and $3.06 in the United States. The rate needed to equalise the burger's price in the two regions is just $1.05. To patrons of McDonald's, at least, the single currency is overpriced."

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