How does Forex\Foriegn Exchange work?

Actually, in the past, during world war 1, FX rate is linked with each country's gold reserve, it's calcultaed according to how many gold reserve each country owns. But during world war 2, each country's FX rate is linked with its USD reserve, and USD is linked with gold price, it's called "Bretton Woods System". After world war 2, Bretton Woods System was disassembled, then the FX rate is linked with each currency's purchasing capacity.

Ask your central bank, they are the ones who calculate the rates.

Hi John Ravi Kanth, It's not calculated. Every transaction that is done deal will be recorded and the price of new transaction will update the old one. It is continuously. Time to time.