How Does A Magnetic Compass Work?

A magnetic compass works because the Earth is like a giant magnet, surrounded by a huge magnetic field. The Earth has two magnetic poles which lie near the North and South poles. The magnetic field of the Earth causes a magnetized 'needle' of iron or steel to swing into a north-south position if it is hung from a thread, or if it is stuck through a straw or piece of wood floating in a bowl of water.