Some of the reasons of fluctuation in exchange rate are as follows:

Interest Rate: When interest rate in home country is higher than other country, more foreign investor will be attracted to invest in home country to make capital gain. In this case demand for home countries currency will increase and may cause it to appreciate.

Balance of Trade: When in country’s balance of payment the export is greater than importer we call there is surplus. Normally it has been the country which face the surplus there currency value increase than country which make deficit.

The other way to look as it is that when exports are more than imports, more importers will sell foreign currency that received by exporting which increases demand for home currency which results in appreciation of currency.

Money Supply & Inflations: At the time central bank of country will print more money, the supply of money will increase in the market. Which results in increase in purchasing power of customer also and which ultimately increases inflation

Since inflation and currency values are inversely related with increase in inflation currency depreciates.

Foreign Debt: With borrowing comes an obligation to repay the money along with interest. So when a country borrows more foreign debt it needs more foreign currency to repay that loan, which makes it to sell more home currency to buy foreign currency resulting in depreciation of home currency.