A WebmasterWorld thread talks about Google not revealing the source of the exchange rate they use. If you are an international AdWords customer and you pay in your local currency, Google needs to use an exchange rate to convert that currency into US currency. Google, however, does not release the source of the exchange rate used for the
A Google representative came out with the following explanation:
"The currency calculation itself is nothing that special, but the way the billing system works and how it is integrated with the ad delivery platform is. I understand that you're not trying to get at the latter, but the product managers are not willing to discuss the former at this time as part of protecting the whole. As one of the two AdWords posters here on WebmasterWorld, I have access to the individuals responsible for this decision, and it's going to stick"
So if you want to know why the exchange rate is so poor, you would have no way out to your query. So, for a large advertiser, with a big budget, it remains to be unknown how the rates are figured out. Google forwards this solution for such an advertiser:
"An easy way out of this situation, for you, would be to simply open a second account in your local currency. Replicate an Ad Group from your existing account in the new account, and pause it in the USD account. Once a billing cycle or two hits, you should have a good idea whether the currency exchange will be in your favor and if your bank really is charging your an exorbitant rate."