If £1 is £1 how does the value of it change? It’s still 100p so shouldn’t there be a set conversion rate? I don’t understand how the VALUE of it changes.
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The value of a currency can change due to supply and demand dynamics in the foreign exchange market. When demand for a currency increases, its value rises relative to other currencies, and vice versa. Factors such as interest rates, economic indicators, political stability, and market sentiment all influence currency exchange rates. So, while £1 is always £1 in nominal terms, its purchasing power relative to other currencies can fluctuate based on these factors.
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