Calculating the Blue
In countries where currencies are convertible (i.e. most of them), the relative values of currencies are determined by the costs of an equivalent good in two different places. For instance, if a Big Mac costs $1 in the US, and $10 (pesos) in Argentina, then the exchange rate would be 10:1, or US$1= $10.
The trick is to find equivalent goods and current prices in different countries. DolarBlue.Net neatly solves this issue by tracking stocks of eight major companies offered on both Argentine and US exchanges. Every twenty minutes, their computers check the prices in both locations, take the average, and publish it as the blue, or parelelo, rate.
The companies used to calculate the blue rate (and their stock ticker in US/Argentina market) are:
Grupo Financiero Galicia S.A. (GGAL/GGAL)
Tenaris S.A. (TS/TS)
BBVA Banco Frances S. A. (BFR/FRAN)
Banco Macro S.A. (BMA/BMA)
Pampa Energía S.A. (PAM/PAMP)
Petrobras Argentina S.A. (PZE/PESA)
Petroleo Brasileiro S.A. (PBR/APBR)
Telecom Argentina S.A. (TEO/TECO2)