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Bank Uses iPods to Compare Currencies

In the market for a new video iPod? Head to Hong Kong or, if Europe-bound, stop off in Switzerland. But avoid Brazil.

One of Australia's biggest banks, the Commonwealth Bank, has used the latest version of Apple's (APPL) music player — the slimline 4GB Nano — to compare global currencies and purchasing power in 55 countries.

Along the lines of the Big Mac index launched 20 years ago by The Economist magazine, the survey prices the recently launched 4GB Nano in U.S. dollars and found Brazilians pay the most for an iPod, shelling out $369.61.

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That was well above second-placed Bulgaria, where locals and visitors pay $318.60 for the player, which Apple recently introduced at the same price as the older, less-capable Nano.

"It's not often that you get something for nothing. Even in technology land, where there are constant improvements in product quality, it ranked as a big deal," Craig James, chief equities economist at Commonwealth Bank, told Reuters.

Hong Kong was the cheapest place to buy a Nano at $148.12, while the United States was second cheapest at $149, followed by Japan ($154.21), Taiwan ($165.82) and Singapore ($167.31).

Australia, where the local dollar has surged to 18-year highs, jumped 11 spots into 8th place with the Nano costing $175.42, cheaper than Germany ($211.62), France ($225.82), South Korea ($180.60) and even China where the machine is manufactured.

Within the euro zone, the Nano's price also differed, with retailers in Greece offering the cheapest deal.

Purchasing power parity surveys compare the prices of goods in different countries and at their simplest level can help show whether one currency is undervalued against another.

James said the results underscored the falling U.S. currency against almost all others around the world.

"It also highlights the effect of tariffs and taxation in countries. The Brazilians, the Argentinians, are going overseas probably to do their shopping," he explained.

"Its clear from the changes in the Apple iPod range that price deflation is alive and well in the technology space. It is a near-nirvana situation for consumers."

The CommSec iPod Index, based on October 2007 prices in U.S. dollars:

1. Brazil $369.61

2. Bulgaria $318.60

3. Argentina $317.45

4. Israel $300.80

5. Peru $294.08

6. Chile $294.06

7. Malta $293.83

8. Egypt $269.10

9. Romania $266.60

10. Uruguay $260.00

11. Turkey $256.12

12. Hungary $254.50

13. Azerbaijan $252.11

14. Serbia $249.14

15. Croatia $245.41

16. Czech Republic $242.54

17. Slovakia $234.13

18. Estonia $226.67

19. South Africa $226.60

20. Finland $225.82

21. France $225.82

22. Russia $220.32

23. Norway $220.20

24. Sweden $215.35

25. Belgium $211.62

26. Austria $211.62

27. Italy $211.62

28. Portugal $211.62

29. Ireland $211.62

30. Germany $211.62

31. Netherlands $211.62

32. Denmark $209.26

33. UK $201.92

34. Mexico $201.87

35. Cyprus $201.85

36. Luxembourg $201.12

37. Poland $200.52

38. Philippines $198.39

39. Spain $197.42

40. Greece $196.51

41. Switzerland $195.43

42. India $183.47

43. Malaysia $181.82

44. Korea $180.60

45. New Zealand $180.58

46. China $179.63

47. Pakistan $179.48

48. Australia $175.42

49. Thailand $174.89

50. Canada $169.68

51. Singapore $167.31

52. Taiwan $165.82

53. Japan $154.21

54. U.S. $149.00

55. Hong Kong $148.12