A history of currency regimes (or exchange-rate regimes) is, by necessity, one of international trade and investment and the efforts to make them successful. Sovereign debt levels and gross domestic product (GDP) figure importantly as well in the degree of a currency's volatility. An exchange rate is simply the price of one currency up against another. When groups of nations in a common area conduct commerce with multiple currencies, their fluctuation could either impede or promote trade, depending on either party's perspective.
Money values are a function of a nation's economy, monetary and fiscal policy, politics and the view of traders who buy and sell it based on their opinion of events that could affect its value. At the risk of oversimplification, the intent of a currency mechanism is to promote the flow of trade and investment with minimal friction or, depending upon the country, the achievement of greater fiscal and monetary discipline (increased monetary stability, full employment and lessened exchange rate volatility) than would otherwise occur. This has been the objective of an integrated European Union (EU).