SCI Stable Currency Index

About EWI | Contact Us

Stable Currency Index Background


How We Choose SCI Currencies

The Stable Currency Index currently comprises equal-value portions of four currencies:

  • the Swiss franc
  • the Singapore dollar
  • the New Zealand dollar
  • the U.S. dollar

How do we choose the SCI's component currencies?

Each currency is the most attractive one within its global financial quadrant from the standpoint of political and fiscal stability. The four quadrants are Europe-Africa, Asia, Oceania and the Americas. To arrive at the safest and most stable currency in each of those quadrants, EWI analyzes each issuing country based on:

  1. The liquidity of its banking system
  2. Its national savings rate
  3. Its central bank's integrity and transparency
  4. The history of its legal system
  5. The extent of its political neutrality
  6. The degree to which it is isolated geographically
  7. Its prospects for inflation
  8. Geographical detachment from the other selections

Why is it important to include four currencies?

The goal of the SCI is to create a stable basket of currencies so that when one component currency is weak, the others are strong. Fluctuations should cancel each other out, leaving a consistent and stable global currency index.

Special note on the U.S. Dollar

The dollar is a necessary component of the SCI primarily because it is the stabilizing factor relative to the other three components. The U.S. dollar is the world’s reserve currency, and when it rises, other currencies mostly fall, and when it falls, other currencies mostly rise. Without the inclusion of the dollar, the SCI would look similar to the Dollar Index inverted, and it would have nearly the same level of volatility.

The EWI Stable Currency Index is maintained by Elliott Wave International, the world’s largest market forecasting company.

Stable Currency Index