Interest Rates and Exchange Rates

Looking at the actual relationship between interest rates and the dollar exchange rate over the last ten years, it is evident from the chart that these have been inversely related for much of the time period (contrary to what theory indicates). This is a good example of how EMPIRICAL relationships such as this can differ from the THEORETICAL relationship. Why is this true? The chart is only looking at these two variables. Other factors relevant to the exchange rate are also changing over this time period. Note, however, that these variables are not perfectly synchronized. This is readily apparent with the most recent bottom in interest rates, which occurred before the recent dollar bottom (and it is not clear at the present time whether this bottom will actually hold).