Who decides the value of a dollar relative to a euro? Why do exchange rates change frequently?
In: Economics
Supply and Demand, same way any other price is determined. When lots of people try to buy one currency and few people are trying to sell it, the people who are selling raise the price because they can, and people still buy it. When lots of people try to sell one currency and few people are trying to buy it, the sellers lower the price to entice the few buyers to choose them instead of someone else.
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