Recently I noticed that the 1 USD was worth 0.8 GBP and now it’s worth 0.78 GBP. Not much deal to an average consumer. What does that mean for the economy for both countries and what does it tell about the relative strength of both currencies?
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It’s all about supply and demand, both within an economy and on a global scale.
China has a strong economy, but $1 US is still worth a little over 7 Yuan. The economies are very different from one another, so the values are different when compared. The wages reflect this as well, since the median Chinese income is around 26,000 Yuan.
They’re different, but that doesn’t mean one is better than the other.
A currency’s value can also rise or fall on the global market without any significant impact on the domestic market. It’s unusual, since imports and exports decide a lot of the global value, but it’s possible.
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