What determines how valuable our currency is?

I live in Canada and I always see the dollar going near the US dollar, past it, drop back down. What exactly determines the value of a Canadian dollar? Who declares that this currency is suddenly worth this much?|||Like most products, the value of currency is actually controlled not by a single person or institution, but by supply and demand. If there is a sudden demand for Canadian goods more people will want Canadian dollars to purchase them with, the Canadian dollar becomes more scarce, and more valuable, so the currency rises.





In many nations, the Federal Reserve also partly controls currency value, though they only do it via supply and demand. By raising interest rates or buying and issuing bonds, the Federal Reserve can control the total number of dollars available. If they buy more dollars and keep them off the market, they become more scarce and more valuable, so the currency rises.