Macroeconomic Variables Affecting Exchange Rates for the US Dollar

Introduction The exchange rate is the price of the country's currency, calculated in the currency of another country. For example, the yen is fixed at dollars. This is known as the dollar exchange rate. In other words, the exchange rate has two elements: local currency and foreign currency. These can be quoted directly or indirectly. The direct estimate is the foreign currency unit price expressed in the local currency and the indirect estimate is the price of 1 unit local currency expressed in foreign currency.

The economic development theory I see is New Developmentism (ND). It is believed that the exchange rate is the most important macroeconomic variable affecting the development path of developing countries. Louis Carlos Breiser Pereira, one of the top economists in Brazil, is the best writer in literature. ND was born in Brazil in the early ruler regime. This is a criticism of his continued macroeconomic system of Fernando Henrik Cardozo, derived from the agenda known from the literature in addition to the enhanced Washington agreement or Washington agreement.

In the past, much research has been done to study the relationship between exchange rate and macroeconomic variables. However, most of past studies (Kanas, 2005 & Pontines, 2011) focused only on developed countries such as the US and New Zealand. In Malaysia, on the other hand, since the financial markets are not mature, researchers are classified as fewer developing countries. Therefore, this research will focus on Malaysia, a developing country that studies the relationship between exchange rate and four macroeconomic variables, foreign direct investment, inflation rate, interest rate and trade balance.

Hussainey & Ngoc (2009) examined the impact of macroeconomic variables on the Ghana stock exchange. They found that macroeconomic indicators such as loan interest rate and inflation rate influence the performance of the stock market. Their results suggest that macroeconomic indicators should be considered for investors in developing countries. This conclusion urged us to study how this conclusion applies to other emerging stock markets in Vietnam. Huberman & Zhenyu (2005) investigated market acceptance of new problems in primary and secondary markets. Such securities can be procured in an organized market such as a stock exchange. As a market in which stocks, bonds and stocks are relatively easy to trade publicly, the stock exchange is very important for investors.