Trying to educate myself about economics, I wanted to find out more about the process of setting daily currency exchange rates. Specifically, I wanted to find out who does it. Since so much money changes hands every day based on the buying and selling of currency, I thought it would be a good idea to know more about how the rates are set. So I googled it.
What I learned was--not much. Bouncing from site to site, I was informed that currency rates are linked to a nation's GDP, political situation, number of imports versus exports, and whether or not the currency was "pegged" to the dollar or another currency. I learned that a staggering number of currencies have been "unpegged" from the dollar in the last few years, including, ironically, even some countries that the U.S. helped to "create", such as Kuwait.
But I did not learn what I set out to learn, namely, what governing body actually sets the daily international exchange rates for currency for the stock market. You know, who actually checks in with a number every morning, and what international body they belong to and what sort of regulations they operate under. I couldn't come up with a single name.
How is it that this isn't common knowledge? And how is it that the people who set these rates, and consequently, who have the power to make millions for currency exchange traders, operate in such complete and utter secrecy? Are they bankers? Economists? Government employees? Who synthesizes all the data used to formulate the rate of a currency, comes up with a number in relation to what other currencies are worth, and then provides that information to the stock market analysts?
Perhaps this IS in fact, common knowledge, and I have somehow unwittingly sequestered myself from any and all of the many sources of this information. I would be most appreciative for any sort of map anyone can provide me as I attempt to follow the money.