Exchange rate and macroeconomic variables: a study in the United States and Australia / Nurul Arina Mohd Rais

Exchange rate indicates the country's overall financial and economic performance. These factors are spacious indicators that could determine the financial growth or the decline that can affect the country's economy. At the present time, counties around the world are facing with a situation where its financial and economic performance could drop at any time. The exchange rate management and its relation to the macroeconomic affect the financial and economic performance of a country as the depreciation and appreciation of the currencies due to the development of the exchange rate policy. Thus, by considering these issues, the aim of this research is to determine what macroeconomic variable that could influence the exchange rate in the United States and Australia. The study is performed using multiple macroeconomic variable such as the Gross Domestic Product (GDP), inflation rate, money supply and interest rate. The data are collected from various sources such as journal, article on internet, World Data Bank and many more. This study is using secondary data from the year 2000 to 2020. The collected data examined using panel data in this research and panel least square method are applied to study the relationship between the dependent variable and independent variables. Results of study revealed that inflation rate, money supply and interest rate have significant relationship with exchange rate in both the United States and Australia.