how a country's currency value is compared with other conutry's?

Answer 1

this is depending of the demand, and not the value

Answer 2

This is a pretty complicated matter, you might want to read some more elaborate stuff to fully understand.

On a day-to-day basis, exchange rates are determined on exchange markets, and the corrective action of traders make sure the rates are similar in all countries (if the euro is cheaper in NYC than in Tokyo, traders will buy Euros in NYC to sell it in Tokyo, so the "price" of the Euro will rise in NYC and drop in Tokyo, until they're equal).

Now, economists consider there are "fundamental" values for exchange rates, which should respect 2 rules:
- for short term adjustment, the interest rates parity should be respected, which means the return of an investment in your country should be equal to the operation consisting of exchanging the same amount for another currency, investing it in the currency's country and selling the currency back with a forward sale.

- for a long-term value, economists use the Purchasing Power Parity, which means the equivalent amount of two currencies should allow to buy the same things in their respective countries. This theory is considered to be some kind of long-term benchmark, but it's not validated statistically (mostly because consumption structures are very different from one country to another).

That's for the theory, but one of the things that make theory invalid is that governments, through central banks, have some action on exchange rates, through the exchange reserves (they can buy or sell their own currencies to influence the exchange rates).
Most "minor" currencies are "pegged" to another one (usually the USD or the Euro), which means their value doesn't float, but stays around a fixed target rate with another currency.

Answer 3

US has removed Gold as the standard and with its might pushed dollar as the defacto standard. The reality is,it is controlled by 10 big banks from developed nations and the loosers are poor and weaker nations. This is the reason,you will find that Asian, African and South American nations with huge resources have a weaker currency but nations with almost zero resources have a strong currency. This is a very skewed mechanism and is the basis for all the troubles worldwide.

Answer 4

Put very simply a currency is worth what the market is willing to pay for it,which is of course affected by many variables,some of them objective,some subjective.The international community uses the US$ as the benchmark value,against which every other currency is valued.

Answer 5

Purchasing Power Parity

Answer 6

Most answers are good.

At one time lots of country were on gold stander.

You will find it in the library and or on Internet.

To-day most of them depend on supply and demand only.

PS

How gold standard worked:
Say a country has 10 oz of gold in it reserve bank per million units of the currency and its next door country has only 5 oz of gold per million units then rate will be 1:2 in favour of first country.

Answer 7

its in the daily stock market. look in the stock market page of the news paper. or on line .

Answer 8

BY VALUE OF ITS POWER TO PURCHASE, ANY PRODUCT LIKE GOLD.