The exchange rate between the U.S. dollar and other currencies is influenced by factors beyond just Purchasing Power Parity and Interest Rate Parity. While these theories are important, they don't fully explain exchange rate movements. Different countries have unique variables that affect their exchange rates. For example, the cost of living varies significantly between countries, impacting exchange rates. Empirical studies show that Purchasing Power Parity doesn't always hold true. This means that converting your salary from one country to another may not accurately reflect your purchasing power. Additionally, differences in interest rates between countries can lead to currency appreciation or depreciation. Overall, exchange rates are influenced by a combination of factors specific to each country.