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1. simplici

   December 18th, 2009 at 2:55 pm

   1

   The Chinese government sets it for the renminbi and there are at least a dozen other governments that set the exchange rates for their own currencies:http://en.wikipedia.org/wiki/Fixed_excha…
   Most countries allow their currency’s exchange rate to float, but occasionally intervene:http://en.wikipedia.org/wiki/Floating_cu…
   Krugman argues that it is really the currency speculators who set the exchange rates for those that float:http://www.econlib.org/library/Enc/Excha…
   For a description of the foreign exchange markets, you can look at:http://en.wikipedia.org/wiki/Foreign_exc…
   For “nitty gritty details” you’ll have to do some work and take some time – perhaps work for one of the major international banks or international exchanges for a while?