what in real terms causes one nations currency to be more valuable than another? I would like to understand in atomic terms what makes the value of one nation's currency change with regard to another.  Read that, without citing complex terminology but in basic terms.

Obviously, if one nation does QE then it would follow that the value of that currency is devalued by the ratio of "easing" to the existing supply.

But in all other cases, suppose you have nation A and nation B and their currencies are initially 1-to-1.  What would make nation A's currency be worth more than nation B's currency, and what is the rationale behind it?

So for example, nation A becomes more efficient in manufacturing than nation B; but how would that make the currency of nation A worth more?  Efficiency is the only answer that comes to mind, so I appreciate further elaboration and hope this question has educational value.
Exchange rates are prices.  Just like any other price, they change based on supply and demand.  Country A's currency appreciates relative to B if the citizens of country B want county A's currency.  Why does B want A's currency? Typically for the purpose of buying the goods, services, and investments produced by A.

So what would be some examples of events that would cause A's currency to appreciate relative to B?


If A starts producing some goods B wants, or producing them efficiently, then B will want A's currency in order to buy them
If A has desirable investments (savings accounts, financial assets, or real assets) and B wants a place to save for the future
If A expands their money supply more slowly than B, which reduces the available supply of A's currency relative to B's.
If A's currency is useful for some other purpose, like acting as a medium of exchange between B and another country C.