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Euro's (OECD) PPP
US President Trump recently bemoaned the fact that the euro is undervalued. While his critics complain that he is prone to exaggeration, in this case, the euro is undervalued. This Great Graphic a 30-year chart of the euro has moved around its purchasing power parity as measured by the OECD. Currently, the euro is about 22% undervalued, and it has been cheap to PPP since for the past five years. The OECD's model suggests fair value for the euro is $1.38. There are a few considerations needed to evaluate this significance. First, recall what purchasing power parity means? It essentially says that currencies should ... (full story)