How does money exchange work?
Money exchange works by exchanging one currency for another currency at a price which is known as the foreign exchange rate. These money exchanges are done through currency dealers that are located throughout the world ranging in size from large international banks to small money exchange shops.The Currency Exchange Rate Is Determined By PriceThe price of one currency as compared to another currency determines the exchange rate between the currencies. The currency of the country that money is being exchanged into is known as the home currency.The Ratio Of One Unit Of Home Currency To Foreign Currency Determines The Rate Of ExchangeIf we are U.S. persons traveling within Germany and want to buy something that costs 160 Euros, then we will have to find out how many Euros are equal to $1. If we assume that $1 is equal to 1.6 Euros, then we would need to exchange $100 in order to get the 160 Euros that we need.Foreign Trade Cannot Be Conducted Without Money ExchangeAnytime goods or service
