In the old days, what happened to exchange rates?

Question

I mean say in like the 1500's, if a frenchman went to England would he have to get his money exchanged or was it just a thing were gold was the universal currency?

Much appreciated.

Answer 1

Yeah gold, silver, and any other precious metals were universal. People from different countries that had different exchanges would just melt those metals down into bars. However spices and other goods like silks and animal skins were just as, if not even more valuable during those time periods. Back then you could pretty much trade any good for another good of equal or greater value. And also during the 1500s silver was more valuable than gold. Thats how Spain became rich off their exploration.

Answer 2

In the time period you mentioned, most purchases were made with gold, silver, and copper coins. By that time barter was not widely practiced in everyday life.

The rulers of each country specified the weight and and metal content of each coin denomination. One could easily exchange coins of one country for another based on their weight. There were bankers who made a living by making change as well as foreign exchange (much like today).