"The bid price is what the dealer is willing to pay for a currency, while the ask price is the rate at which a dealer will sell the same currency. (Investopedia 2022)

People buy and sell stocks daily right? If there is a lower demand and a lot of supply, then the sellers will sell to the buyers on the bid. Say I want to buy stocks in amazon. Today's sells price for a share in stock for amazon is $137.82.(robinhood 2023) If i want to sell this stock I will have a bid and ask price. Depending on the demand, a seller may set the price for the stock at $138.20 for sell on this stock. But the buyer has the option to bid lower if he or she wants. The seller at this point has the option to take the offer or continue searching for the asking price. 

Even if we use an auction as an example. The asking price of a car could be $30k, but the bid may start at $20k. People will bid based off the demand for this item. Exchange rates work along the same lines. If currency for Eur 1 will equal USD $1.30/$1.40, and if the buyer wants to $5000 in EUR currency, they would have to pay US dealer $7,000 (Investopedia 2023). These numbers will change daily, depending on the country you are trying to exchange from or to."

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