It is used to tell whether a currency move came from the dollar side or from the other currency. If the won strengthens while this index barely moves, the dollar did not weaken and something happened to the won, which points the search for causes back home.
Watch 1
Predictions & track record (1)
Awaiting gradingThe won came back 115 against the dollar in a month, and not because the dollar weakenedScore on August equity flows and the rate. If foreign investors return to heavy net selling and the rate still holds below 1,450 at month end, count it as the surplus coming through, and if the rate slides back above 1,500 as selling resumes, count it as a lull.