Hacker News Reader

Comment by alister | Hacker News Reader

What a difference a year makes. Brazil had the most overvalued currency in the world a year ago[1] according to the Big Mac Index, but today it's undervalued by 10.6%.

It strikes me that currency exchange rate is a very inconspicuous thing with a big effect. Unlike inflation, interest rates, or how much rent you pay--which everyone is aware of--most people don't sense changes in exchange rate, the effect of which is just as profound.

[1] http://brazilsense.com/index.php?title=Items_more_expensive_....

View on HN

McDonald's in Brazil targets a customer base very different from MacDonald's in other countries. In the US, McDonald's is cheap fast food; in Brazil its stores appeared first in posher shopping malls. The local alternative (xis) is a lot cheaper, so pricing probably has a lot to do with market segmentation, which would render such comparisons useless.

Brazilian here and I can attest to this.

In the U.S, I only go to McDonald's if I'm alone and don't have an option( Chipotle is closed).

In Brazil, you'll see some families choosing it over local cuisine for 'modernity' or even 'sophistication'.

What? Where?

You're either talking about lower-lower middle class, or far outside the large metros, I presume?

I'm amazed no one mentioned Bob's Burgers, at any rate. Are you in the same Brazil I'm in?

Lower-income middles class can't afford R$15 burgers with the average (not median, which is much lower) household income per capita being ~R$1000/month. In practice, less than 20% of families make that much. With combos, 10 meals would account for 20% of pre-tax income.

Data is a couple years old, but still relevant: https://sacrariopessoal.files.wordpress.com/2014/10/faixascm...

For what its worth, in my experience its similar in China. I even saw an ad showing a guy taking his girlfriend to McDonalds on a date.

Pics of 'xis' from my street: https://www.google.com.br/search?q=xis+do+gelson&num=20&rlz=...

>most people don't sense changes in exchange rate

Perhaps if you're American. Here in Canada, people are made aware of the US/CDN exchange rate daily, and large moves (like recently) are news.

The exchange rate is news, however I haven't really noticed any effect on my life (maybe when I travel, however the places I visit in the US are still cheaper than where I live).

> Brazil had the most overvalued currency in the world a year ago[1] according to the Big Mac Index, but today it's undervalued by 10.6%.

According to the adjusted index, it's still the world's most overvalued currency.

It's interesting to see how most countries dropped last year because of the exchange rate.

For a weird graph look at Venezuela, $9.08 in 2013 and $0.67 now.

Reply on news.ycombinator.com