Who decides what each currency is worth against another?

Question

in exchange rates who or what makes currencies worth against each other. for example 1 euro= 1.47 us dollars. who or what decides this and what makes it go up and down. please give me simple answers not ones that are to complicated to understand

Answer 1

Well, basically, it's all to do with demand and supply. On a particular day, if people demand a lot of dollars (mostly in terms of investment), then the value of the dollar will go up (in the same way as if more people want to buy apples, then the price of apples go up).

A big influence on the value of a currency depends on how well an economy is doing, for example, if the UK is doing well, then they do a lot of business with other countries, which means that the other country has to buy lots of UK Pounds to be able to buy UK goods.

Answer 2

central bank or fed interest rates . If the rates go up or even look like they are going up it will strengthen the currency. opposite happens when rate goes down.

is also geopolitics , crude and a few other things but rates is the main one.

Answer 3

It's the market.  The value is what willing buyers of the currency will pay willing sellers of the currency.