International Currencies Differ In Value
Perhaps you never wondered where money came from, but it's kind of interesting. See, long time ago gold, silver, copper and other metals were used as money, but it was hard to determine purity and weight. The king stepped in and stamped his face on coins, which guaranteed the weight and purity of the royal coinage. Standardization of weights and measures.
In a way, that's what currencies are still about. Except these days, the value of a nation's money depends not on purity or weight, but rather upon a country's creditworthiness, productivity, access to markets and resources, etcetera.
You may not care about financial history, although it's fun to learn a certain amount, but suffice it to say that you can get rich without knowing it. The basic skill required to get rich is to calculate relative values of things, and trade wisely to obtain more for less. The difference between currency values allows a person to do this type of trading very fluidly, because the currency markets are very active.
Merchants are always needing to spend money in other lands. For example, a Mexican oil company needs to buy drilling rigs in the Netherlands. So they have pesos, and they need to get Euros to buy the rigs. They go to the bank, and the bank sells them the Euros. How many Euros do they get for each Peso? That's based on the Exchange Rate.
In a way, that's what currencies are still about. Except these days, the value of a nation's money depends not on purity or weight, but rather upon a country's creditworthiness, productivity, access to markets and resources, etcetera.
You may not care about financial history, although it's fun to learn a certain amount, but suffice it to say that you can get rich without knowing it. The basic skill required to get rich is to calculate relative values of things, and trade wisely to obtain more for less. The difference between currency values allows a person to do this type of trading very fluidly, because the currency markets are very active.
Merchants are always needing to spend money in other lands. For example, a Mexican oil company needs to buy drilling rigs in the Netherlands. So they have pesos, and they need to get Euros to buy the rigs. They go to the bank, and the bank sells them the Euros. How many Euros do they get for each Peso? That's based on the Exchange Rate.