-
Measuring the value of currencies: Exchange rates and inflation
The FRED graph above shows the exchange rate of two currencies with the US dollar: the Swiss franc and the Colombian peso. We chose these two for their obvious contrasting history. The Swiss franc is considered to be among the strongest currencies—meaning that it tends to appreciate with respect to many other currencies. The Colombian peso is the opposite, with continuing depreciation with respect to strong currencies. (One peculiar benefit of using this currency is that it was never rebased—i.e., never had a few zeroes removed from its high face value. This numeric consistency avoids potential issues with ... (full story)