Currency Power Ranking

I’ve been experimenting the last couple of weeks with calculating the relative strength of a currency against a basket of currencies.  For example, to find the "relative strength" of the GBP, I have been comparing the price changes of GBP/USD, EUR/GBP, GBP/JPY, GBP/CHF, GBP/CAD, GBP/AUD, and GBP/NZD.  This value is plotted from 0 (weakest) to 100 (strongest).  I have been calculating moving averages of these values from 2-15 periods (daily).

What I am going to post is the relative strength of currencies for today (period closing 5 pm EST) This is the relative strength for just today.  Below today’s currency rankings will be the 9-day relative strength moving average.

This is strictly an experiment.  Use these values at your own risk.  A value of 100 indicates that a currency gained against all other currencies today.  A value of 0 indicates that a currency lost against all other currencies today.

Currency Power Rankings for  01-17-2006

1.    USD (100.0)
2.    GBP (92.08)
3.    CHF (86.84)
4.    EUR (72.54)
5.    AUD (69.06)
6.    CAD (28.30)
7.    JPY   (6.98)
8.    NZD   (0) 

9-day moving average rank

1.   NZD (63.48)
2.   JPY (57.74)
3.   GBP (55.50)
4.   EUR (53.65)
5.   CHF (48.89)
6.   USD (45.29)
7.   AUD (41.46)
8.   CAD (33.37)

If you want to check out my experimental graph of this year’s 9-day moving average currency ranking, you can find it at http://www.forexproject.com/staticfiles/relative_strength.php

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