An index of a currency's value relative to a group (or basket) of other currencies, where the currencies in the basket are given weights based on the amount of trade between the countries that use the currencies. Also called a trade-weighted exchange rate.
A weighted average rate that is obtained by weighing the exchange rates between a country's currency and the main currencies (dollar, sterling, euro, yen, etc.) using the country's trade balance structure.
An exchange rate index that is a weighted average of the value of a unit of domestic money in terms of all other foreign currencies, where the weight on each foreign currency is equal to the proportion of the economy's international trade undertaken in that currency.