XML Schema How to Restrict Attribute by Enumeration

The numerical value seems to be missing from your price definition. Try the following:

<xs:simpleType name="curr">
  <xs:restriction base="xs:string">
    <xs:enumeration value="pounds" />
    <xs:enumeration value="euros" />
    <xs:enumeration value="dollars" />
  </xs:restriction>
</xs:simpleType>



<xs:element name="price">
        <xs:complexType>
            <xs:extension base="xs:decimal">
              <xs:attribute name="currency" type="curr"/>
            </xs:extension>
        </xs:complexType>
</xs:element>

New answer to old question

None of the existing answers to this old question address the real problem.

The real problem was that xs:complexType cannot directly have a xs:extension as a child in XSD. The fix is to use xs:simpleContent first. Details follow...

---

Your XML,

<price currency="euros">20000.00</price>

will be valid against either of the following corrected XSDs:

Locally defined attribute type

<?xml version="1.0" encoding="UTF-8"?>
<xs:schema xmlns:xs="http://www.w3.org/2001/XMLSchema">

  <xs:element name="price">
    <xs:complexType>
      <xs:simpleContent>
        <xs:extension base="xs:decimal">
          <xs:attribute name="currency">
            <xs:simpleType>
              <xs:restriction base="xs:string">
                <xs:enumeration value="pounds" />
                <xs:enumeration value="euros" />
                <xs:enumeration value="dollars" />
              </xs:restriction>
            </xs:simpleType>
          </xs:attribute>
        </xs:extension>
      </xs:simpleContent>
    </xs:complexType>
  </xs:element>
</xs:schema>

Globally defined attribute type

<?xml version="1.0" encoding="UTF-8"?>
<xs:schema xmlns:xs="http://www.w3.org/2001/XMLSchema">

  <xs:simpleType name="currencyType">
    <xs:restriction base="xs:string">
      <xs:enumeration value="pounds" />
      <xs:enumeration value="euros" />
      <xs:enumeration value="dollars" />
    </xs:restriction>
  </xs:simpleType>

  <xs:element name="price">
    <xs:complexType>
      <xs:simpleContent>
        <xs:extension base="xs:decimal">
          <xs:attribute name="currency" type="currencyType"/>
        </xs:extension>
      </xs:simpleContent>
    </xs:complexType>
  </xs:element>
</xs:schema>

Notes

• As commented by @Paul, these do change the content type of price from xs:string to xs:decimal, but this is not strictly necessary and was not the real problem.
• As answered by @user998692, you could separate out the definition of currency, and you could change to xs:decimal, but this too was not the real problem.

The real problem was that xs:complexType cannot directly have a xs:extension as a child in XSD; xs:simpleContent is needed first.

A related matter (that wasn't asked but may have confused other answers):

How could price be restricted given that it has an attribute?

In this case, a separate, global definition of priceType would be needed; it is not possible to do this with only local type definitions.

How to restrict element content when element has attribute

<?xml version="1.0" encoding="UTF-8"?>
<xs:schema xmlns:xs="http://www.w3.org/2001/XMLSchema">

  <xs:simpleType name="priceType">  
    <xs:restriction base="xs:decimal">  
      <xs:minInclusive value="0.00"/>  
      <xs:maxInclusive value="99999.99"/>  
    </xs:restriction>  
  </xs:simpleType>

  <xs:element name="price">
    <xs:complexType>
      <xs:simpleContent>
        <xs:extension base="priceType">
          <xs:attribute name="currency">
            <xs:simpleType>
              <xs:restriction base="xs:string">
                <xs:enumeration value="pounds" />
                <xs:enumeration value="euros" />
                <xs:enumeration value="dollars" />
              </xs:restriction>
            </xs:simpleType>
          </xs:attribute>
        </xs:extension>
      </xs:simpleContent>
    </xs:complexType>
  </xs:element>
</xs:schema>