The value of a currency is decided by the size of the economy (apart from the US dollar which functions as a base currency for other currencies) and the amount in circulation is controlled by the central bank in order to ensure stable growth. If too much currency is supplied, a more than desired inflation rate may hurt the economy, and if currency is not supplied enough, sluggish growth will hurt sentiment.

Basically, currency value fluctuates relative to the size of the economy, and the supply and demand of currency is dependent on which direction the economy is taking. A clear example of this is the foreign exchange market. Exchange rates fluctuate every second because market participants expect a different value for currency A relative to another currency B.

For example, the GDP of South Korea for the year 2016 is equivalent to 1.411 trillion USD, and if the South Korean economy is expected to grow relative to the US economy, KRW will appreciate relative to USD, given the supply of KRW stays the same.