how is one currency more powerful than another? If you exchange $100 to 102 francs don’t you still have $100 but in francs?
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Value is relative, not absolute. For the average person, a currency’s value depends entirely on what you can spend it on. If you live in the US and want to buy a Whopper at your local Burger King location, you have to spend USD for that whopper. It doesn’t matter if you walk in there with the equivalent amount of Chinese Yuan or you have ten times as much Yuan as the current exchange to USD. If you bills don’t have buying power when and where you need to pay for something, they might as well be worthless.
What makes a currency worth more relative to another depends on how much of it is out there and what it can be spent on. If a country prints too much currency into circulation, no one will want it, and it loses value. If a country produces goods that you can’t buy anywhere else in the world, that money becomes valuable, because people need it to spend on that good.
To illuminate this process a little more, let’s say that you have bought something on Amazon, which will ship from China to the US. Your USD gets processed by Amazon, and goes into Amazon’s American bank account. Then, Amazon will take out Yuan from a Chinese bank, and use it to pay the seller. For most international transactions, even though you might only have to pay in your home currency, the business that you give the money to will convert it to the currency of the target country somewhere down the line.
The thing about money is that it’s constantly being spent or invested, and regularly gets printed or loaned, meaning that the amount available is in constant flux. At the same time, as new businesses grow and old ones die, supply and demand, what you can buy with any given currency, is also in constant flux. Exchange rates go up and down constantly because they’re based on two core principles that are both changing by the hour.
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