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Discussion » Questions » Finance » What determines the value of a country's currency? I know when the Brexit vote occurred and the results were in the value of the pound dropped. Why?
RosieG

What determines the value of a country's currency? I know when the Brexit vote occurred and the results were in the value of the pound dropped. Why?

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Posted - September 2, 2016
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  • 739
    Because the markets know we will be screwed by leaving the EU, even if the berks who voted for it don't.
      September 2, 2016 6:17 AM MDT
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  • 113301

    So the future potential of that exigency is what drove the value down so fast? I dunno Harry. Does that make sense to you? It dove in ANTICIPATION of what was to come? Is that normal? You can see how ignorant I am about the subject. They react before the fact rather than after? Thank you for your reply! :)

      September 2, 2016 6:28 AM MDT
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  • 5835

    There is no honest money anywhere in the world. The only reason paper currency has any value at all is that the government that issued it will accept it in payment of taxes. All unbacked paper money in all of history has resulted in collapse within forty years. (It is now 45 years since Nixon abolished gold redemption of the USD in 1971.) The value of one currency versus another depends only on how a buyer assesses the possibility of a collapse while he is holding it.

    At one time the Russian ruble was comparable to the US dollar. Consider THIS.

      September 2, 2016 1:33 PM MDT
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