Currencies have prices’ like antinyhg you buy butter, soap, hamburgers you name it. The price’ of the $ is expressed as its value in other currencies such as the pound and the euro, and depends on supply and demand. If there is a greater demand for the $ in relation to other currencies, the price [value ] of the $ will rise, conversely, if demand for other currencies increases relative to the $, the value of the $ will fall. And it is this latter example which is the basic explanation. It has nothing to do with the size of the economy and is not directly related to relative wealth.
Currencies have prices’ like antinyhg you buy butter, soap, hamburgers you name it. The price’ of the $ is expressed as its value in other currencies such as the pound and the euro, and depends on supply and demand. If there is a greater demand for the $ in relation to other currencies, the price [value ] of the $ will rise, conversely, if demand for other currencies increases relative to the $, the value of the $ will fall. And it is this latter example which is the basic explanation. It has nothing to do with the size of the economy and is not directly related to relative wealth.