The main factor that plays a role in establishing the price of a country's currency is the supply and demand of said currency. Within the foreign exchange market, each country has its currency with a specific price, that can vary through time. What alters this price number is the demand and supply. The demand for the currency is going to increase or decrease depending on how much the country's exports are demanded, and how much speculators assume that they can earn on changes in the currency value. The supply of the currency is going to vary depending on the level of the domestic demand for imported goods. This happens because when a country demands goods that are from a different country, it needs to pay them in the other country's currency, and to obtain them it needs to sell its own currency. Both of these factors, together, are what determine the value of a country's currency.
