Do foreign exchange transactions - changing my dollars into cash euros
- cause declarable capital gains?  is there way to decide whether its
short or long term gains?

If you just buy Euros, you have made no profit on the transaction.  If
you later exchange them back for dollars, you may or may not have made
a profit.
At present (?1 = US$ 1.30), for $100 you would get roughly ? 77.  If
the Euro rose to a rate of ? 1 = $ 1.50, and you exchanged back to
dollars, you would get about $ 115. Sounds good, but the exchange rate
could go the other way, and you would lose.
US taxes?  I don't know.  I wouldn't mention it if the exchange rate
moved in your favor, but you hadn't exchanged back into dollars, and I
(personally, no advice) also wouldn't if you had.
As an erstwhile banker who has seen the $-DM rate since it was  1 to
4, I wouldn't recommend to any individual that he or she speculate in
foreign exchange.
That still doesn't answer you question, but someone who knows how to
research US tax law should be able tell you/us - I am interested too.