Sunday , 19 November 2017


U.S. Dollar Ranks #4 Behind Currencies of Australia, Canada and New Zealand Among G10 Countries Based on Monetary Policy – Here's Why

Merk Investments has ranked the attractiveness of the currencies of each G10 country based on the monetary and fiscal policies of each country and the strength of each country’s economy to come up with what they call the Merk Currency Score™. This Score should prove invaluable in supporting investment decision-making across countries and regions. Go here to see where your country ranks. Words: 367

Axel Merk, Kieran Osborne and Yuan Fang (http://www.merkfunds.com/) have recently published the Merk White Paper – Monetary Policy  and it can be found here in its entirety compliments of Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!). This paragraph must be included in any article re-postings to avoid copyright infringement.

By way of introduction to the linked White Paper, the authors state, in marginally edited excerpts, that:

We have developed a score for each currency within each category, that is, a Merk Monetary Score™, a Merk Fiscal Score™, and a Merk Economic Score™ with the aggregate of those metrics being an overall Merk Currency Score™….

Merk Monetary Score™

The focus of the Merk White Paper – Monetary Policy is to rank currencies based upon a monetary policy framework. Within this category we focus on specific metrics that we consider to be bellwethers for long- and short-term economic health, price stability and ultimately, to have a significant implication on relative currency strength or weakness. Those specific metrics are:

  • the consumer price index (CPI),
  • the producer price index (PPI),
  • market-based expected inflation measures of each central bank and
  • the change in the size of a central bank’s balance sheet, as a proxy for the absolute change in money supply.

A breakdown of the above overall monetary policy assessed components for the G10 currencies to arrive at our Merk Monetary Score™ can be seen here.

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[In summary,] based on monetary fundamentals within the G10 universe, we find that, as of March 31, 2011, the Australian dollar and the Canadian dollar appear the most compelling two currencies based upon our Merk Monetary Score. Conversely, our methodology ranks the Swiss franc and British pound as the two least attractive currencies within the G10 universe based upon monetary fundamentals.

[The rankings of the currencies of said G10 country currencies are as follows:

  1. Australia
  2. Canada
  3. New Zealand
  4. USA
  5. Sweden
  6. Euro area
  7. Norway
  8. Japan
  9. United Kingdom
  10. Switzerland]
Editor’s Note: The above article may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.

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