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Drop the Big Mac, Pick Up an iPhone to Divine Dollar’s Direction

Nomura’s gauge takes opposite view to other valuation indexes
U.S. currency weaker in 2016 as Fed starts two-day meeting

Video player cover image — Big Mac and iPhone Indexes Clash on Valuations

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July 25, 2016, 11:00 PM UTCUpdated onJuly 26, 2016, 4:34 PM UTC

Investors accustomed to using the price of a Big Mac to tell whether a currency is cheap or expensive may have to reboot their thinking.

Nomura Holdings Inc.’s new iPhone index suggests the dollar is the most undervalued currency among 23 global peers, based on the cost of the Apple Inc. product in different countries. That’s the opposite conclusion of existing purchasing-power parity measures, such as The Economist’s Big Mac Index, which has the greenback as the fourth-most-overvalued currency.