Here’s another table I don’t know what to make of: The Economist’s Big Mac index
Based on the theory of purchasing-power parity, under which exchange rates should adjust to equalise the cost of a basket of goods and services, wherever it is bought around the world.
In the present case, the "basket" is — literally — the Big Mac.
The cheapest burger in our chart is in China, where it costs $1.30, compared with an average American price of $3.15. The Economist claims this implies that the yuan is 59% undervalued.
If that’s the case, then any subsequent de-pegging of the Yuan to the Dollar could have devastating consequences for the greenback.
I do not trade currencies, but I find this to be a real head scratcher.