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Otherwise, it's just the arbitrary way each country established it's monetary system (ie what does a peso, or a dollar, etc buy you). And how inflation (and deflation) changes the exchange rates.
Why are the pound, euros gain more in return when you exchange it for USD Dollars?
What is the reason behind this?
Why can't it be 1:1 ratio : USD to EUR or USD to GB
I know for instance that 1 USD can be traded for 19 MXN Pesos
Each country or monetary system as in the EU, issues and controls the nature of its money and money system. Each country has its own politics and policies that affect the value of their currency. This all fluctuates for a many reasons over time, and relative values of currencies then fluctuate.
I didn't comment before, but I am always fascinated/mildly appalled when people do not understand why monetary units are not identical except for local names. It's maybe a little understandable when talking about the US, Canada and Australia, but it's pretty basic economic concept and that econ is so skimpily taught that this confusion is... common is disheartening.
Each country or monetary system as in the EU, issues and controls the nature of its money and money system. Each country has its own politics and policies that affect the value of their currency. This all fluctuates for a many reasons over time, and relative values of currencies then fluctuate.
Except that countries in the Euro-zone have no central bank and, hence, no monetary policy apart from that dictated by the EU central bank. Sweden and the UK have not tied their currency to the Euro, but the Danish central bank has imposed a floating exchange rate between the Danish Krone and the EU Euro.
Except that countries in the Euro-zone have no central bank and, hence, no monetary policy apart from that dictated by the EU central bank. Sweden and the UK have not tied their currency to the Euro, but the Danish central bank has imposed a floating exchange rate between the Danish Krone and the EU Euro.
That's what I meant by the EU monetary system.
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