Trade Weighted Index?? (1 Viewer)

[GaNeSh]

Hey people im having trouble with the TWI. I understand the definition but i really dont understand its significance. Like exactly is it a measure for and what effects can changes in it hav?? much appreciated.....

 

[sunjet]

it measures our exchange rate to our major trading partners, just like the normal exchange rate is to one country and hence has a major impact on exports/import when it appreciates or depreciates.

 

[SPYKE_JOE]

If the TWI improves it displays Australia's greater economic strength. Increases in TWI demonstrates our ability to purchase greater imports. This is what happens to the TOT but im not sure if it represents the same as TWI.

 

[Oz]

the TWI is important because it is weighted to our trading partners. thus if its going up then our exports on the whole are now less competive. likewise the TWI going down means that our exports become more competive. think of it as the same as the exchange rate but for all our trading partners at once rather than just one country