Exchange Rate FAQs

How is the value of a currency determined?

Everyday a nation’s currency might be more valuable or less valuable than the day before.

What determines the changes? Buyers.

Countries all over the world purchase other countries currencies, which determine the value. The American Dollar is strong because many countries buy a lot of US Dollars. If investors and buyers decided to stop buying US Dollars, then the value of the US dollar would drop significantly. Confidence also plays a huge part in the value. Investors and buyers often panic at the first sign of economic trouble and will sell or buy causing a currencies value to change.