Currency Basket
a.k.a. Basket of currencies
A weighted mix of several currencies treated as one, used to peg a currency or to measure one's overall…
In plain English
A weighted mix of several currencies treated as one, used to peg a currency or to measure one's overall strength.
A currency basket blends several currencies, each given a weight. The US Dollar Index measures the dollar against a basket led by the euro. The IMF's Special Drawing Right is a basket too.
Some countries peg to a basket instead of one currency, so their exchange rate does not swing wildly when a single partner's currency moves.
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