system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: How do countries determine the value of foreign currency?

I am aware it has to do with the Foreign Exchange Market(?) but what factors within it determine the value of a country's currency?
gpt
Think of it like this: other than in the currency market, the only thing a Mexican peso is good for, is you can give it to a Mexican and they'll sell you something, or do something for you.

So the value of a peso is based on, "do they make stuff in Mexico that you might want", or "do Mexicans know how to do stuff that you might want done".

When a country has industries that make good products, or has a workforce that's productive and educated, you should value their currency more.  If their industries suck (don't make much, or make things you don't consider useful) and their workers suck (uneducated, unhealthy, unreliable), then their currency doesn't deserve much value either.  Or to think of it another way, if lots of people want things that Mexicans make/do, there will be a lot of demand for pesos, because you can give those to Mexicans and get awesome stuff.  So the value of the peso will rise.

The currency markets are a bunch of people each making their own reads on those factors, and trying to predict a little bit into the future how those factors are going to change.  And when those people trade with each other, we end up with a kind of weighted average of all their opinions as the value for each currency.