Currencies are traded against each other in the form of currency forex market hours oanda foreign. Exchange rate is called the exchange price between two currencies. 50, this means that with 1 euro, you can get 1.
Stakeholders buy and sell currencies in real time and continuously. Before 1944, it was impossible to buy the dollar against the euro. Then, in 1944 there was the Bretton Woods conference in order to ensure economic stability after war. Exchange rates were moving only if a state decides to devalue or revalue its currency by acting with its foreign exchange reserves. Technically, a currency could be challenged in the foreign exchange market if the price was too high or too low. The Bank of England did not have enough foreign exchange reserves to maintain its fixed exchange rate was forced to devalue its currency. 1 billion on this transaction and was dubbed “the man who broke the Bank of England.
The price of a currency against another currency on the Forex is now a balance between supply and demand of the various stakeholders for a particular currency. Funds that are key players in the Forex. Forex is a highly liquid market. Forex is not a physical market, you treat that money. It’s not like on the equity market or when you buy a stock, you own shares of the company. For ease of understanding, think buying one currency is like buying a share of a country. So your “action Euro Zone” will appreciate against the “American action” and you will have earned money.