Value” should mean that the nominal exchange rate of a country’s currency against foreign currencies (the exchange rate listed by the bank) is relatively high. In fact, nominal exchange rate = real exchange rate * foreign commodity price / domestic commodity price.
In the above formula, foreign commodity prices are measured in foreign currencies, domestic commodity prices are measured in one currency, and the real exchange rate refers to the exchange ratio of commodities between the two countries (for example, two units of Chinese commodities are exchanged for one unit of American commodities, then the real exchange rate of RMB to USD is is 0.5).
Therefore, we can say that whether a country’s currency is “valuable” is directly proportional to the international market price of domestic commodities, inversely proportional to the domestic price level, and directly proportional to the foreign price level.
The reason why the pound is valuable is that firstly, the composite price index of goods produced in the UK is relatively high in the international market, and secondly, the domestic price level of the UK is relatively low.
Exceptions, we can see some very special phenomena, for example, the prices of commodities in Japan and South Korea are very high, but the currency value of Japanese yen and Korean won is very small. why? This is because the domestic relative prices of Japan and South Korea with one currency as the unit of measurement are relatively high.