The main factor that underlies the currency exchange values is the relative levels of supply and demand for the currencies in question. When there is strong demand for a currency, all other things being equal, the exchange value of that currency goes up. The demand for a currency is generally dependent upon how many of that country's goods and services are desired by other countries. When Country A wishes to buy goods or services from Country B, it must buy Country B's currency first and use that currency to buy the goods or services. So you might say that a currency is strong if there is demand for it and that there is demand for the currency if there is demand for goods and services produced by that country