Weights for the TWI

The Australian dollar trade-weighted index (TWI) is the price of the Australian dollar in terms of a group (or ‘basket’) of foreign currencies based on their share of trade with Australia. While bilateral exchange rates are the most frequently quoted exchange rates, the TWI provides a broader measure of whether the Australian dollar is appreciating or depreciating against the currencies of its trading partners.

New weights for the Australian dollar TWI will apply from 21 December 2022. The weights are based on the composition of Australia’s merchandise goods and services trade for the 2021/22 financial year. The updated TWI includes a group of 17 foreign currencies. This is the same number of foreign currencies as in the previous TWI; however, the Philippine peso replaced the Canadian dollar based on the method of calculation.

The Chinese renminbi continues to have the largest weight in the TWI, although its weight has decreased from 37 per cent to 31 per cent. The weight of the Japanese yen increased by 3½ percentage points to 12½ per cent, and it is now ranked second in the TWI. The weight of the South Korean won also increased, up 2 percentage points to around 7 per cent, to be the fifth highest ranked currency in the TWI. Other changes in individual currency weights were mostly within +/– 1½ percentage points.

For further details regarding the methodology used for constructing the index, please see ‘TWI – Method of Calculation’.