Changes in currencies are caused by a mix of economic forces, market speculation, and events in other countries. Interest rates, inflation, and trade balances are all economic factors that have a big effect on the value of a currency. For instance, when interest rates are higher, investments denominated in that currency earn more money. This brings in foreign capital and makes the currency go up in value. Trade balances can also change the quantity and demand for a currency. Short-term changes can also be caused by market speculation, which is based on traders' predictions about how the economy will do in the future. Geopolitical events, like political instability or changes in government policy, can also make things unclear and affect the strength of a currency. These things change all the time, which is why currency values on the foreign exchange market are always changing.