[quote=“whatseesaw, post:3, topic:77178, full:true”]
Here’s the link to the Mataf website with the currencies indices (it’s still there)
The only caution I would add to this is all indices are rebased to year 2000 - in other words, its relative to year 2000 and not absolute.[/quote]
Sorry, this statement does not make sense to me.
An index must have a basis – a starting point to which a value is assigned, usually 100.
Mataf uses January 1, 2000 as the basis for their indexes, which is an arbitrary choice, but a perfectly acceptable arbitrary choice.
There is no such thing as an index without a basis (a starting point, a point of reference).
So, when you refer to an “absolute” index, I don’t know what you are taking about.
Mataf uses the 8 major currencies, and indexes each one of them versus the other 7. So, their USD index, for example, measures the percentage change (since Jan 1, 2000) versus EUR, JPY, GBP, CHF, CAD, AUS, and NZD, weighting each of those 7 currencies equally.
If this “basket” of currencies, and this weighting, make sense to you, then the Mataf indexes are what you’re looking for.
Other indexes – for example, the USDX, the FXCM Dollar Index, the Bloomberg Dollar Index, and others – use different “baskets” and different weightings.
In the case of the USD, a typical way to construct an index is to use a “basket” consisting of the currencies of the major trading partners of the United States, and to weight those currencies in the calculation according to the “market share” of each country’s trade with the U.S. In this type of index, the Chinese yuan and the Mexican peso will be included, and will be given weight in accordance with the value of Chinese and Mexican trade with the U.S.
This will produce an index value different from the value calculated by Mataf. If trade-weighted indexes make more sense to you than Mataf indexes, then you will probably have to be content with just a USD index, a EUR index, and a GBP index. I’m not aware of trade-weighted indexes for the other 5 major currencies.
Every one of these indexes, regardless of the “basket” and weighting used in the calculations, must have a starting point – a basis.