I have been looking into PPP which is what most fundamentalists use for FX. Has anyone come across any comparisons on PPP between the IMF and OECD. By establishing a base year the theory is a better estimate of PPP. Has anyone found any data for this argument.
Pingback, first and most importantly, are you a Pinback fan? Second, can you provide some detail or some links to info on techniques in trading on purchase price parity? How do you measure it? Perhaps the Big Mac Index would be better than the IMF figures? Would you take technical entries and exits in the direction toward PPP or would you hold a position until an index hits parity? Etc.?
-Adrian
I am still looking into PPP. Purchasing Power Parity. I don’t know a lot about it other than one countries products being equal in price to another country (the big mac Index) as an example, in relation to the foreign exchange market. I use the standard Fundamentals for determining strength in FX currencies. Consumer prices, Interest rates, NFP etc…Is there anyone here who uses any type of indicator for PPP. I have heard the weighted SMA is a good indicator. Didn’t mean to confuse anyone, I am still looking into this PPP thing myself. Thanks!