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Head to your bank or credit union before you leave to avoid paying ATM transaction costs. You may even receive a better exchange rate. Credit unions and banks will exchange your dollars into a foreign currency before and after your trip when you have a checking or savings account with them.

Currency substitution is also known as dollarization when the U.S. dollar (USD) is the currency that is being used as a substitute. Currency substitution is commonly motivated by the need for a more stable monetary unit or in countries that are too small to capture the economies of scale of having their own currency.

A global currency would mean all transaction costs related to international finance would be eliminated as well. Exchanging currencies always requires a conversion, which banks charge as a fee, and there can be a loss in value in changing one currency to another. Having one global currency would eliminate all of this.

Changes in the value of a currency are influenced by supply and demand. Currencies are bought and sold, just like other goods are.As you will see below, supply and demand of a currency can change based on several factors, including a country's attractiveness to investors, commodity prices, and inflation.

Currency can be converted using an online currency exchange, or it can be performed manually. To use either method, you must first look up the exchange rate using an online exchange rate calculator or by contacting your bank.

Under a fixed exchange rate system, only a decision by a country's government or monetary authority can alter the official value of the currency. Governments do, occasionally, take such measures, often in response to unusual market pressures.

Simply explained, in order to weaken its currency, a country sells its own currency and buys foreign currency usually U.S. dollars. Following the laws of supply and demand, the result is that the manipulating country reduces the demand for its own currency while increasing the demand for foreign currencies.