Why do exchange rates change all the time?
Why the news explanation is usually invented
Financial reporting attributes each day's move to whatever news broke that day, because a story needs a cause. But the currency market trades enormous volumes continuously, and most short-term movement is the sum of countless unrelated decisions. Same-day explanations are narrative, not analysis.
Over months, the fundamentals do show through. Over days, they mostly do not.
Interest rates and why expectations matter more than decisions
Higher interest rates tend to attract money seeking better returns, which pushes a currency up. But markets move on expectations, so a rate rise everyone predicted often causes no movement at all, while a hint that the next one may not come can move the rate sharply.
This is why the currency sometimes falls on apparently good news — the good news was already priced in, and the detail underneath disappointed.
What this means if you are just converting money
Trying to time it rarely pays. For everyday amounts, the spread you are charged matters far more than the daily rate movement: a 2 % margin is bigger than most weeks of fluctuation. Comparing providers beats waiting for a better day.
For large or scheduled transfers, splitting the amount across several dates averages out the timing rather than betting on one.
