It doesn’t really matter what the cost of living is or how much you make what matters most is how much money you have left over each month. Incomes also need to be taken into account. However, cost of living is only half the story. Many of the small towns only have populations in the hundreds. Yet living in the countryside in Australia is a bit harder than in the US because of the lack of people, which means a lack of certain infrastructure facilities and services. Once you leave the large cities and head to the countryside, prices are much cheaper and similar to what I’ve found in the Midwest. (By 2015, the AUD had decreased in value to about $1.20 for $1 USD). For comparison, it was $1 USD = $1.50 AUD ten years ago.
#AVERAGE COST OF A BIG MAC IN AUSTRALIA MAC#
The key thing to remember is that the Big Mac Index is an accurate indicator of the fundamental value of currencies, and traders can benefit from its use in trading.Rents have also increased in recent years due to the mining boom and the strength of the Australian dollar, which was just a few cents off the US dollar in the 2010’s. We can draw similar conclusions for other Forex currency pairs. After all, if the Japanese yen is significantly oversold against the US dollar, traders should refrain from opening long positions on USD/JPY. We can hardly do it in the short and medium terms, but the Big Mac Index can serve as a helpful assistant while long-term trading.įor example, it can be used as a filter when opening positions in the Forex market. Notably, according to the Big Mac Index, all major currency pairs, except the Swiss franc and Norwegian krone, are undervalued against the US dollar. The average Big Mac price in the Eurozone is $4.95, meaning the currency is undervalued by 14.72%. Norwegian krone overvalued by the market by 10.03%.Īccording to the Big Mac Index authors, Euro is also undervalued by the market. However, the value of this pair is currently quoted around 0.93 in Forex, which makes the Swiss currency overvalued by the market by 20.16%. Notably, the currencies of India, Pakistan, the Philippines, and other low-income countries are not in the top five most undervalued currencies in 2022.Īs for the most highly valued currencies, the statistics by countries show that the world’s most overvalued (expensive) currency is the francs in Switzerland.Ĭonsidering that Big Mac costs 6.98 francs in Switzerland, the USD/CHF rate expressed in the Big Mac Index terms should be 1.12 francs per dollar.
In the list of the world’s most undervalued currencies, the Russian ruble and the Lebanese pound are accompanied by the Malaysian ringgit (undervalued by 58.92%), Indonesian rupian (undervalued by 59.31%), and the Romanian leu (undervalued by 58.65%).
Therefore, we can conclude that the market undervalues the Turkish currency by almost 68%. However, the lira is cheaper in Forex – about 13.42 lira per US dollar (as of January 2022). While the price of the burger in the United States is $5.81, the Turkish currency exchange rate is 4.30 lira per dollar in terms of the Big Mac Index.
In 2019, the Russian ruble was the most undervalued (by 64.5%) currency worldwide.īig Mac costs $1.86 in Turkish. Thus, the Russian ruble is the world’s most undervalued (cheapest) currency according to the Big Mac Index.
The Russian ruble exchange rate expressed in the Big Mac Index in January 2022 is 23.24 ruble per dollar.Ĭonsidering that the current market rate of the Russian currency is about 77.42 ruble, rather than 23.24 per US dollar, the ruble is undervalued by approximately 70%. The most relevant Big Mac Index so far (as of January 2022) is presented in the table below.
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