VARIANSE GBP Trade Weighted Index

Mid Price
Change %
Bid
Ask
Weekly Open
Daily High
Daily Low
Prev. Close
Overlay Instrument

Basket Composition

Constant value = 45.314212801333

Performance

Today .
This Week .
This Month .


What is this Index?

The VARIANSE Trade Weighted Indices are based on Major Central Banks' basket exchange rates

They track the performance of a currency against a defined basket of currencies.
Each basket is limited to the currencies with the largest weights in the relevant central banks officially published index. The respective weights are scaled up to 100%.
TWI's are a measure of the value of the currency relative to the currencies of the country's major trading partners. The Index is the Central Banks' preferred summary measure for capturing the medium-term effect of exchange rate changes on the economy and inflation.
By utilising currency indices, traders no longer simply have the option of tracking single currency pairs - they can objectify, and analyse a specific macro-economic view. The added benefit being that the underlying indices are less volatile than individual cross rates.


How is the FX Index Calculated?

Now for the maths...


1. First we calculate the Geometric Mean (GM) of the     Basket


    

    where:
    N          = Number of components
    Pair N  = Market price of Nth Pair

2. Then we multiply the value A by the constant     factor*


    

       *A constant factor is used to turn the basket into an
       index which sets the value of the basket to usually
       equal 1 or 100 at a pre-determined date in the past,
       this allows for easier tracking and simpler pricing.