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Abstract The interplay of exchange rates among nations significantly influences both international and domestic trade, underscoring the pivotal role of the foreign exchange market (Forex) in a country's economic landscape. Forex fluctuations have a significant impact on the everyday lives of both government agencies and the public population, directly influencing a country's prosperity or misfortune. This work proposes an advanced fuzzy time series model that incorporates domain universe sub-partitioning, parameter adjustment optimization methodologies, and interval forecasting methods. We utilized this model to examine annual exchange rate patterns between the Pakistani rupee (PKR) and the US dollar (US$), comparing its forecast accuracy to that of other models. Our proposed methodology outperformed existing methodologies in terms of forecasting precision, providing stakeholders with valuable insights for making informed, data-driven business decisions that benefit both individual firms and the country overall.