Eli5: why does currency strenght matter? Why does it matter if my currency is 1=1£ or 10=1£?
In: Economics
It matters for international business.
For example, the Canadian Dollar, 1.38CAD=1USD. If a business in Canada is making a sale to a company in the US, the US company cares about what it’s going to cost in USD, but the Canadian company cares about what they’ll make in CAD because that’s what they need to pay their business expenses with (most notably salaries). If the exchange rate gets too imbalanced, they might not make enough money to actually pay their employees.
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