Measured in Burgers, Greenback Overvalued

NEW YORK — Despite being nibbled down to multi-month lows Friday against major currencies, the dollar still is considered at its most overvalued point in the 16-year history of the Economist magazine’s Big Mac Index, which measures the cost of the ubiquitous sandwich in 120 countries.

“Overall, the dollar now looks more overvalued against the average of the other big currencies than at any time in the life of the Big Mac Index,” the weekly wrote in its edition dated today.

The index measures the exchange rate that leaves a McDonald’s Corp. Big Mac costing the same in the U.S. as elsewhere, also known as purchasing-power parity, or PPP.

The PPP for Big Macs shows that the yen still is 19% undervalued against the dollar, while the euro is 5% undervalued against the greenback, the magazine said.

Australia’s dollar is undervalued against the U.S. dollar by 35%, the most among major currencies.

The Canadian dollar also is undervalued against the U.S. dollar, by 15%, according to the Big Mac Index.

The average cost of a Big Mac in the U.S. is $2.49.

Worldwide, the cheapest Big Mac can be found in Argentina at the equivalent of 78 cents, largely as a result of the devaluation of the peso from its decade-old one-to-one peg with the dollar in January.

The most expensive Big Mac is in Switzerland at $3.81.