The trade-weighted exchange rate index for the euro dropped from 114 in December 2008 to 96 in August 2012, a fall of 16%.

FORBES: Europe Will Recover As The Euro Falls

Now take a look at the chart, which plots a foreign exchange rate along with a price index for the global stock market.

FORBES: Put Some Money in Japan

The Nikkei Currency Index series plots changes in the effective exchange rate against a base value of 100 for the value in 2005.

FORBES: Is Smart Money Betting on a Weaker Yen?

The level of the index reflects the looseness of financial conditions: an increase in interest rates or the exchange rate leads to a tightening, a rise in share prices to a loosening.

ECONOMIST: Alan’s key | The