Comments on: How can the currency exchange rates be calculated? http://www.currencyexchangemarket.com/blog/how-can-the-currency-exchange-rates-be-calculated/ Thu, 17 May 2012 19:46:35 +0000 http://wordpress.org/?v=2.7 hourly 1 By: haggismoffat http://www.currencyexchangemarket.com/blog/how-can-the-currency-exchange-rates-be-calculated/comment-page-1/#comment-1701 haggismoffat Sun, 30 Aug 2009 05:07:01 +0000 http://www.currencyexchangemarket.com/blog/how-can-the-currency-exchange-rates-be-calculated/#comment-1701 NO currency exchage just means how much a unit of currency can be exchanged for. It is not much different then what you do every day i.e. 1 dollar = 100 cents or 1 dollar bill = 100 pennies The difference is currency markets change and the change is affected by many factors including strength of economy. However, you can not say that 1dinar=3dollar means Kuwait is economically 3x stronger than the US. You can only look at changes in the exchange to compare changes in economies. If the value of the dinar goes up relative to the dollar then it probably means Kuwait economy is growing faster than the US economy. NO
currency exchage just means how much a unit of currency can be exchanged for. It is not much different then what you do every day
i.e. 1 dollar = 100 cents or 1 dollar bill = 100 pennies

The difference is currency markets change and the change is affected by many factors including strength of economy. However, you can not say that 1dinar=3dollar means Kuwait is economically 3x stronger than the US.
You can only look at changes in the exchange to compare changes in economies. If the value of the dinar goes up relative to the dollar then it probably means Kuwait economy is growing faster than the US economy.

]]> By: Alby http://www.currencyexchangemarket.com/blog/how-can-the-currency-exchange-rates-be-calculated/comment-page-1/#comment-1700 Alby Wed, 26 Aug 2009 21:21:09 +0000 http://www.currencyexchangemarket.com/blog/how-can-the-currency-exchange-rates-be-calculated/#comment-1700 Don't let the numerical exchange rates confuse you. The exchange rate and what you can purchase with that currency are different things. Its call "Purchasing Power Parity". What you want to find out is what is the PPP between the USD and DInar. That will determine if your rich or poor compared to a Kuwaiti. Research the BigMac index.. Don’t let the numerical exchange rates confuse you. The exchange rate and what you can purchase with that currency are different things. Its call “Purchasing Power Parity”.

What you want to find out is what is the PPP between the USD and DInar. That will determine if your rich or poor compared to a Kuwaiti. Research the BigMac index..

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