I use google (usa) ppc and sometimes I bid for a keyword 5p and google says inactive minimum bid is 6p. I raise the bid ad presto.
But the £-$ fluctuates and I dont notice bids becoming inactive when the pound gets weaker.
What I think and its hard to prove, that we are paying £ prices whilst the Yankies are paying $ prices, so whilst I pay 6p I think they are paying 6c.
This has come up quite often on WMW; and according to "AdWords Advisor"; all bids are converted into USD (actually millionth's of US dollars) using an exchange rate that changes daily.
With regards to you not seeing a keyword fluctuate in and out of active status; I would imagine that the system has an element of change-damping to prevent just that occurring - in exactly the same way that the thermostat on your hot water tank doesn't go mad when the water temperature is fluctuating around the set temperature. Within that period of change; you no doubt have sufficient time to score enough quality points to avoid having the keyword disabled even if there is a more substantial drop.
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