I have always wonder why its so much stronger ? when you go to Japan, everything is cheaper in a sense and the U.S dollar means more in Japan. Why is that ?
In: Economics
Being a stable currency is different than relative value of currencies. You can have a very stable currency that no one wants and therefore has no value in other countries. What you’re describing is called PPP – purchasing power parity.
Relative value of currencies has more to do with how much the international market wants and buys a nation’s goods, investment prospects, as well as how much people would pay to go live in said country.
There are a host of other variables that impacts it, but yeah, as far as I know it basically boils down to how much money do people of other nations want to spend into that country.
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