We study the reaction of exchange rates to macroeconomic news. We demonstrate that low interest rate currencies predominantly react to macroeconomic announcements consistent with predictions from Taylor rule models, but that high interest rate currencies also regularly react in the opposite way. In particular good U.S. economic news is generally good for the USD vis-a-vis low interest yield currencies, but the response is more balanced for the USD vis-a-vis high interest rate currencies. Over time there are sustained periods that one of the two cases prevails. We also find that forward looking economic data such as consumer and producer confidence more frequently result in high interest rate currency reactions opposite to the predictions from Taylor rule models, whereas price measures such as PPI and CPI more often draw a reaction consistent with Taylor rule models.