What primarily determines the value of a currency in a flexible exchange rate system?

In a flexible exchange rate system, the value of a currency is mainly determined by supply and demand in the foreign exchange market. This means that if more people want to buy a currency, its value will go up, and if fewer people want it, its value will go down. For example, if a country’s economy is doing well, more investors might want to buy its currency to invest there, increasing demand and raising its value. Other factors, like interest rates and economic stability, also play a role by influencing how attractive a currency is to investors. Overall, the value of a currency is like a balance between how much people want it and how much of it is available.