Most people have absolutely no idea how the value of their currency is determined. They do not understand who is standing behind the curtain pulling the strings so to speak. The truth of the matter is that other individual investors are the ones who are figuring out how much your dollar will buy.
The value of all currencies are determined in what is known as the Forex market. This is a place where all of the major World Currencies are traded against one another. The purpose of this is to determine what currencies are going to be worth in comparison to one another. It is important that they do this in order to help us figure out how global trade can be organized.
When people are trading currencies against one another, they are impacting the markets for everyone. They are deciding if your dollars are going to be enough to buy the things that you need. These values are all determined based on supply of a currency of course, so there are really many players determining the value of currencies.
The good news about all of this is the fact that you can be a trader in the Forex market if you are interested in doing so. This market is open to individuals so long as they have the money to put up for this kind of investing. There are some people who are able to make a great living for themselves by investing in these markets. It is something that can bring great riches or a total monetary collapse. It all depends on the amount of research someone does, the trades the make, and the mood of the market.
All of this just goes to show you that the complexity of how your currency is valued is rather complex. It is one of those things that has many moving parts, and there are few people who understand the whole process. If you would like to be involved with this market, then be prepared to spend a lot of time studying everything that you need to know about it in order to succeed. If you are not interested in investing in this market, at least you know know where the value of your currency comes from.
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The answer depends on the currency in question. The whole idea of paper currency's value is that it is a promise of funds. If you have a $20 united states dollar, then the united states treasury is promising you that the value is $20. However the actual value is nothing, if the united states treasury stopped recognizing paper currency, then it would be worthless.
floating
A currency whose value is fixed either to the value of another currency, or to the value of gold, is called a "pegged currency"
This link will answer your question http://ezinearticles.com/?How-are-Currency-Values-Determined?&id=467643
Pegged currency ^For me on apex 2022 :)
The answer depends on the currency in question. The whole idea of paper currency's value is that it is a promise of funds. If you have a $20 united states dollar, then the united states treasury is promising you that the value is $20. However the actual value is nothing, if the united states treasury stopped recognizing paper currency, then it would be worthless.
floating
It's basically the demand for the currency, which is determined by the economy of a country.
A currency whose value is fixed either to the value of another currency, or to the value of gold, is called a "pegged currency"
The currency brokerage rate is determined using the EUR / USD exchange rate. Read more at daytrading.about.com/od/currencies/a/WhatAreCurrenci.htm
Value is determined by the demand and the supply
250000 turk lirasi is this currency hAs value or not?
Governments issue currency, and if you trust the government, you will trust its currency.
A fixed currency is used in countries where the value of the money is closely tied to the value of gold, or the value of another country's currency. A floating currency is one that changes depending on the state of the market, i. e. supply and demand.
Because the value of each currency is based on their economic strength. Currency is traded between countries - and one currency may be in more demand (increasing its value) than another.