|
World Currency Unit
There are two different types of world currency unit in use today that have different origins and usages. History The WCU was proposed by Lok Sang Ho of Lingnan University, Hong Kong. The WCU was first intended to be the basis for denominating global bonds, a debt instrument that is issued globally and is subscribable by people and institutions around the world. Simply put, it is a GDP-weighted basket of key currencies each of which is indexed against inflation for the relevant countries. The WCU is defined with respect to a base year, so that each unit represents the same global purchasing power as at that base year, when it is equal to US$1. If there is inflation, the WCU will be worth more than $1 after the base year, but will represent the same purchasing power. The unindexed basket, called the benchmark basket of key currencies, is the basis for the derivation of effective exchange rate indices that has been demonstrated to be both easy to compile and superior to most of ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Global Bond
A global bond is a Bond (finance), bond which is issued in several countries at the same time. It is typically issued by a large multinational corporation or sovereign entity with a high credit rating. By offering the bond to many investors, a global issuance can reduce borrowing cost. These bonds are usually issued by large multinational organizations and sovereign entities, both of which regularly carry out large fund-raising exercises. By issuing global bonds, an issuing entity is able to attract funds from a vast set of investors and reduce its cost of borrowing. Global bonds are issued in different Currency, currencies and distributed in the currency of the country where it is issued. For example, a global bond issued in the United States will be in United States dollar, US Dollars (USD), while a global bond issued in the Netherlands will be in euros. Bonds are loaned in terms of years; for example, a three-year US$2 billion global loan will be paid back by the country it is ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Effective Exchange Rate
The effective exchange rate is an index that describes the strength of a currency relative to a basket of other currencies. Suppose a country has N trading partners and denote Trade_i and E_i as the trade and exchange rate with country i respectively. Then the effective exchange rate is calculated as: E_ = E_1 \frac + ... + E_N \frac Although typically that basket is trade-weighted, the trade-weighted effective exchange rate index is not the only way to derive a meaningful effective exchange rate index. Ho (2012) proposed a new approach to compiling effective exchange rate indices. It defines the effective exchange rate as the ratio of the "normalized Exchange Value of Currency i against the US dollar" to the normalized exchange value of the "benchmark currency basket" against the US dollar. The US dollar is here used as numeraire for convenience, and since it cancels out, in principle any other currency can be used instead without affecting the results. The benchmark ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
World Currency
In international finance, a world currency, supranational currency, or global currency is a currency that would be transacted internationally, with no set borders. History First European Banknotes (17th century) The first European banknotes were issued in 1661 by Stockholms Banco. Founded by Johan Palmstruch, it was a predecessor of Sweden's central bank Sveriges Riksbank. Spanish dollar (17th – 19th centuries) In the 17th and 18th centuries, the use of silver Spanish dollars or eight-real coins, also known as "pieces of eight" extended from the Spanish territories in the Americas westwards to Asia and eastwards to Europe. This then formed the first worldwide currency. Spain's political supremacy on the world stage, the importance of Spanish commercial routes across the Atlantic and the Pacific, and the coin's quality and purity of silver helped it become internationally accepted for about three centuries. It was legal tender in Spain's Pacific territories of Philippines, ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
WOCU
The World Currency Unit WOCU (XCU) is an EU trademarked synthetic global currency quotation. It is derived from a weighted basket of currencies of fiat currency pairs covering the top 20 economies of the world. Each country’s currency representation is weighted by its relative proportion of the top 20 economies as measured by GDP. The WOCU’s nearest comparator was the more narrowly constructed ECU, the European Currency Unit basket that preceded the successor Euro. The WOCU offers a transparent, relatively stable currency quotation as a hub currency reference for cross border trade to reduce volatility and risk. It reacts to the economic growth and decline of constituent country economies, adjusting the prominence of their respective currencies. The WOCU is outputted in up to real time, in sub second updates. Input FX data is sourced from global aggregated FX data providers. Countries within the Eurozone (those that have replaced their national currencies with the Euro) a ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
European Currency Unit
The European Currency Unit (, ; , ECU, or XEU) was a unit of account used by the European Economic Community and composed of a basket of member country currencies. The ECU came in to operation on 13 March 1979 and was assigned the ISO 4217 code. The ECU replaced the European Unit of Account (EUA) at parity in 1979, and it was later replaced by the euro (EUR) at parity on 1 January 1999. As a unit of account, the ECU was not a circulating currency and did not replace or override the value of the currency of EEC member countries. However, it was used to price some international financial transactions and capital transfers. Exchange rate Using a mechanism known as the "snake in the tunnel", the European Exchange Rate Mechanism was an attempt to minimize fluctuations between member state currencies—initially by managing the variance of each against its respective ECU reference rate—with the aim to achieve fixed ratios over time, and so enable the European Single Cu ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
WCU – World Currency Unit
The World Currency Unit (WCU) is an indexed unit of account (unit of account) that stands for a unit of real global purchasing power. Proposed by Lok Sang Ho of Lingnan University, Hong Kong, it was first intended to be the basis for denominating global bonds, a debt instrument that is issued globally and subscribable by people and institutions around the world. Since each unit by design represents a stable unit of purchasing power, the stipulated interest rate on WCU-denominated bonds represents a real interest rate. In principle, the common denomination of bonds by issuers from different parts of the world using the WCU, as well as the greater transparency of real interest rates, will produce more efficient capital markets, as savers and borrowers around the world converge in their understanding of what each basis point of interest means and are protected against two key sources of uncertainty, namely inflation and exchange loss risks. Irving Fisher in his 1911 book The Purchasing ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Indexed Unit Of Account
When a daily indexed unit of account or Daily Consumer Price Index (Daily CPI) or monetized daily indexed unit of account is used in contracts or in the Capital Maintenance in Units of Constant Purchasing Power accounting model, deferred payments and constant real value non-monetary items are indexed to the general price level in terms of a Daily Index such that changes in the inflation rate—in the case of monetary items—and the stable measuring unit assumption—in the case of constant real value non-monetary items—have no effect on the real value of these items. Non-indexed units, such as contracts written in nominal currency units and nominal monetary items, incur inflation or deflation risk in the case of monetary items. During all periods of inflation (low, high or hyperinflation), the debtor pays less in real terms than what both the debtor and creditor agreed at the original time of the contract/sale. On the other hand, in periods of deflation, the debtor pays more in ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Unit Of Account
In economics, unit of account is one of the money functions. A unit of account is a standard numerical monetary unit of measurement of the market value of goods, services, and other transactions. Also known as a "measure" or "standard" of relative worth and deferred payment, a unit of account is a necessary prerequisite for the formulation of commercial agreements that involve debt. Money acts as a standard measure and a common denomination of trade. It is thus a basis for quoting and bargaining of prices. It is necessary for developing efficient accounting systems. Economics Unit of account in economics allows a somewhat meaningful interpretation of prices, costs, and profits, so that an entity can monitor its own performance. It allows shareholders to make sense of its past performance and have an idea of its future profitability. The use of money, as a relatively stable unit of measure, can tend to drive market economies toward efficiency. Historically, prices were often ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Purchasing Power
Purchasing power is the amount of goods and services that can be purchased with a unit of currency. For example, if one had taken one unit of currency to a store in the 1950s, it would have been possible to buy a greater number of items than would be the case today, indicating that the currency had a greater purchasing power in the 1950s. If one's monetary income stays the same, but the price level increases, the purchasing power of that income falls. Inflation does not ''always'' imply falling purchasing power of one's money income since the latter may rise faster than the price level. A higher real income means a higher purchasing power since real income refers to the income adjusted for inflation. Traditionally, the purchasing power of money depended heavily upon the local value of gold and silver, but was also made subject to the availability and demand of certain goods on the market. Most modern fiat currencies, like US dollars, are traded against each other and commodity mon ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Efficient Market Hypothesis
The efficient-market hypothesis (EMH) is a hypothesis in financial economics that states that asset prices reflect all available information. A direct implication is that it is impossible to "beat the market" consistently on a risk-adjusted basis since market prices should only react to new information. Because the EMH is formulated in terms of risk adjustment, it only makes testable predictions when coupled with a particular model of risk. As a result, research in financial economics since at least the 1990s has focused on market anomalies, that is, deviations from specific models of risk. The idea that financial market returns are difficult to predict goes back to Bachelier, Mandelbrot, and Samuelson, but is closely associated with Eugene Fama, in part due to his influential 1970 review of the theoretical and empirical research. The EMH provides the basic logic for modern risk-based theories of asset prices, and frameworks such as consumption-based asset pricing and in ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
International Dollar
The international dollar (int'l dollar or intl dollar, symbols Int'l$., Intl$., Int$), also known as Geary–Khamis dollar (symbols G-K$ or GK$), is a hypothetical unit of currency that has the same purchasing power parity that the U.S. dollar had in the United States at a given point in time. It is mainly used in economics and financial statistics for various purposes, most notably to determine and compare the purchasing power parity and gross domestic product of various countries and markets. The year 1990 or 2000 is often used as a benchmark year for comparisons that run through time. The unit is often abbreviated, e.g. 2000 US dollars or 2000 International$ (if the benchmark year is 2000). It is based on the twin concepts of purchasing power parities (PPP) of currencies and the international average prices of commodities. It shows how much a local currency unit is worth within the country's borders. It is used to make comparisons both between countries and over time. For ex ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Special Drawing Rights
Special drawing rights (SDRs, code ) are supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund (IMF). SDRs are units of account for the IMF, and not a currency ''per se''. They represent a claim to currency held by IMF member countries for which they may be exchanged. SDRs were created in 1969 to supplement a shortfall of preferred foreign exchange reserve assets, namely gold and U.S. dollars. The ISO 4217 currency code for special drawing rights is and the numeric code is ''960''. SDRs are allocated by the IMF to countries, and cannot be held or used by private parties. The number of SDRs in existence was around XDR 21.4 billion in August 2009. During the global financial crisis of 2009, an additional XDR 182.6 billion was allocated to "provide liquidity to the global economic system and supplement member countries' official reserves". By October 2014, the number of SDRs in existence was XDR 204 bil ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
