Direct answer
Forex exchange works by matching buyers and sellers who want to exchange one currency for another. When someone trades currency, they do not exchange “value” directly; they exchange one currency amount for another currency amount using a specific exchange rate at the time of the trade.
How the exchange rate is set
An exchange rate is the quoted relationship between two currencies (for example, how much of Currency B is needed to buy one unit of Currency A, or vice versa). The “market” price you see is the outcome of supply and demand for those currencies. If more participants want to buy Currency A than sell it, its price relative to Currency B tends to rise; if demand falls or selling increases, it tends to fall.
Currency appreciation refers to a situation where a currency becomes “stronger” relative to another currency—meaning one unit of that currency can purchase more of the other currency than it could previously. Currency depreciation is the opposite direction.
Example and independent checks
Suppose a quote states that 1 unit of Currency A equals 2 units of Currency B. If the rate later changes so that 1 unit of Currency A equals 2.2 units of Currency B, Currency A has appreciated relative to Currency B (it buys more of Currency B than before). You can verify this kind of change by checking consistent historical quotes for the same currency pair and by ensuring you compare the same rate convention.
To check mechanics around execution, also consider that real trading happens through order matching and quoted prices, not instantly at “the latest displayed number.” In practice, the difference between buy and sell prices (often called a spread) and your trade size can affect what you actually receive.
Limitations and risks
Forex exchange does not remove uncertainty. Exchange rates can move rapidly due to changing expectations and flows in the currency market, and past price movements do not predict future ones. You also need to understand operational factors such as spreads, liquidity, and settlement terms used by the platform or venue you use.
A useful way to stay grounded is to separate concepts: exchange rates describe conversion relationships, appreciation describes direction versus another currency, and execution quality depends on the actual trading conditions at the moment of the trade. No outcome is guaranteed, and verification depends on using consistent definitions and reliable quoted data.