Snapshot for Westpac Nominal Effective Exchange Rate Trade Weighted Chinese Yuan (ATWICNY)

Rate Profile Information for ATWICNY

A trade weighted index (TWI) is a geometric average of bilateral exchange rates. Westpac calculates daily indices for Japan, South Korea, China, Taiwan, Singapore, Malaysia, Thailand, Indonesia, Hong Kong and the Philippines. We also calculate an index for China using the 'all-in' rate implied from the 6 month NDF to give a measure of market 'expectations' for China. Trade weights are calculated using IMF Direction of Trade Statistics and/or national data. A sufficient number of trading partners are used to capture on average 85% or more of each countries two way merchandise trade.A decline in a TWI indicates that the currency is depreciating against the currencies of its major trading partners, and hence is becoming more competitive. An appreciation in a TWI indicates that the currency is strengthening against its major trading partners, and hence is becoming less competitive. The Westpac Asian trade weighted indices therefore provide a guide to the strength or weakness of Asian currencies and their competitiveness even when those currencies are not free floating. In calculating these indices we have paid special attention to include all trading partners in the region (such as Indonesia in the case of Singapore and Hong Kong in the case of China) and updating trade weights in a timely fashion as recommended by BIS working paper No 217 'Estimation of Asian effective exchange rates: a technical note'.