system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5:How did the dollar gain so much value?
gpt
Currencies are like any other good, commodity, or service: the value is set by supply and demand. If there are many more dollars than there are people who want dollars, the people who have dollars and want to trade them for something else need to offer more dollars to get what they want.  If there are many fewer dollars than there are people who want dollars, it's the opposite. This is the same as how you determine the value of anything else in a modern economy: cars, books, lettuce, burritos. All supply and demand.

The supply and demand for money comes from several places.  If you think you're going to want to buy things in the future, you want money so that you'll be able to make those purchases: that's demand. But you also are willing to spend money proportionate to how much you have and how much you expect to make, which is supply.  The government requires a certain % of the national income be paid to it in taxes (demand), and pays money back out through numerous programs (supply).  The central bank is always gathering in old ratty money, which it destroys (demand) and printing fresh new money (supply). Money can also be created or destroyed without physical currency: when a bank or a credit card company says you can borrow $5,000 from them, any time you feel like it, you suddenly have $5,000 available to spend (supply); but if they decide you're a bad credit risk and take that away from you, and demand that you repay what you owe them as soon as possible, suddenly you can spend less (demand).

If you are asking about why the dollar has been gaining ground against the Euro, which was in the news yesterday, that is a side effect of the success of European monetary policy.  When countries are in a recession, that basically just means that people are hoarding money because they're afraid if they spend it, they won't have enough money if there is an emergency later.  But in a market economy, people can only earn money when other people spend money, so the more people hoard because they're worried about how much they earn, the less economic activity there is, and the less they earn.  Money-hoarding is basically just a problem with the supply of money, though: it means that if you multiple how much money each family thinks they need to hoard by the number of families, there isn't enough money left over, not hoarded, to fuel the buying and selling in a normal economy.  So the solution is for a central bank in a depressed country to print tons of money.  Supplying more money changes the relationship between supply and demand (everyone can have enough for their money-hoarding and for their buying and selling), lowers the value of money, causes people to want less money and more goods/services, and the economy revives and everyone has a job to do again.

The Eurozone isn't really a "country" of course, and different Eurozone countries can be in a recession or not at different times, so the whole thing is a mess, but ignore that for the moment! The point is that most recently, the Eurozone central bank decided that Europe needs more money, and succeeded in changing the ratio of supply and demand of euros.  That made the euro less valuable, which was the point.  But the relative value of currencies is determined by how much you can buy in the same currency: for example, if one television costs 1,000 euros or 1,000 dollars, and that television were the only thing that was traded between Europe and the USA, the exchange rate would be 1:1.  But if the value of the euro falls and the television costs 2,000 euros now, the exchange rate will change to 2:1, and we will say the dollar "gained value" or "strengthened" against the Euro, or that the euro "lost value" or "weakened" against the dollar. But as you can see, if Europe is in a recession they *want* the euro to be "weak", because then Americans will buy European televisions (which gives Europeans work to do and revives the European economy) and Europeans won't buy American televisions (which doesn't help the European economy unless the Americans they bought them from spin around and immediately buy something from Europe).

How is that? Is that too hard for ELI5 or too simplified?