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
Imagine there’s a country called Apple and one called Banana and you worked in a currency exchange in Banana
Apple is a country perpetually on the brink of collapse, doesn’t pay their bills, has a weak economy, doesn’t sell a lot of things to other countries, etc
Banana (your country) is a generally healthy country that doesn’t have those issues. Banana also sells a lot of things to other countries and if you buy those things, you need to use Banana dollars
A foreign tourist shows up with 100 Apple dollars and wants to get as much Banana dollars as they want
Apple dollars aren’t very in demand. It’s not like too many people want them. What can you even buy with them? Maybe it’s only worth 50-60 Banana dollars
Now flip the roles – a currency exchange in the country of Apple has a guy show up with a bunch of Banana dollars. Those are in demand. If you have those, you can buy a lot of stuff from the country of Banana. Banana dollars are going to be pretty strong in that exchange
Foreign currency valuations are super weird and there are always exceptions, but that’s the general concept. Most of the globe *wants* US dollars to buy things you need US dollars to purchase so they’re generally pretty strong
edit: or even simpler, imagine you have a loser neighbor kevin and a successful friend james
if james writes you an IOU, that clearly carries more “value” than one from kevin. james has his stuff together and you *want* him around
those IOUs are dollars
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