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Author Topic: How to estimate the value of a currency?  (Read 6273 times)
Grinder
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January 23, 2012, 03:16:11 PM
 #21

If I was talking about estimating the value of a USD compared to the ILS i would probably check the prices of specific items in both currencies, the government's policy on exchanging money and managing their currency, maybe have a look at the country's GDP and natural resources.
But how is it actually done?
It's done by one guy with USD finding a guy with ILS, and they agree upon a trading price. Really, that is all there is to it. Of course, if that makes buying stuff with ILS really cheap compared to buying it with USD, the ILS available at that price level will be bought up and the ILS price will increase compared to USD.
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