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| Currency Basket |
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A selected group of currencies whose weighted average is used as a measure of the value or the amount of an obligation. A currency basket functions as a benchmark for regional currency movements - its composition and weighting depends on its purpose.
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A currency basket is commonly used in contracts as a way of avoiding (or minimizing) the risk of currency fluctuations. The European Currency Unit (which was replaced by the euro) and the Asian Currency Unit are examples of currency baskets.
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