Can you make money from the Big Mac index?
Arbitrageurs have long sought to exploit the idea of purchasing-power parity
THIS WEEK Hong Kong’s monetary officials stepped into the foreign-exchange markets after dusk to defend the city’s long-standing peg to the dollar. Given everything the financial hub has faced in recent months—protests, a pandemic and punitive American sanctions—you might assume it is battling to prop its currency up. You would be wrong. The city’s monetary authority has been forced to sell Hong Kong dollars repeatedly since April to stop the currency strengthening too much.
This article appeared in the Finance & economics section of the print edition under the headline “McJobbers and brokers”
Finance & economics September 19th 2020
- Is the world economy recovering?
- What is fuelling China’s economic recovery?
- How would Joe Biden change America’s trade policy?
- What is the point of green bonds?
- How many of America’s top companies have a female CEO?
- Who will buy Borsa Italiana?
- Can you make money from the Big Mac index?
- How does today’s tech boom compare with the dotcom era?
From the September 19th 2020 edition
Discover stories from this section and more in the list of contents
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Has Japan truly escaped low inflation?
Its central bankers are increasingly hopeful
How American bankers dodged the MAGA carnage
The masters of the universe have escaped an anti-globalist revolt
China’s financial system is under brutal pressure
When will something break?