RB... just like the price of any other commodity in the market is determined by the interaction of the forces of demand and supply, likewise exchange rates are also established in a similar way..
their currency's value is higher most probably because it has a greater demand in the international market, thanks to all the foreign presence in their country... the foreigners go there and trade their dollars/euros for local currency, hence putting an upward pressure on its value by dint of greater demand.. this is just the basic idea.. there are many other ways through which central banks control the value of their currency, for instance purchasing its own currency to create an artificial shortage in the market, hence raising its value.. !