WHAT DRIVES EXCHANGE RATE UNCERTAINTY FROM THE PERSPECTIVE OF GLOBAL AND DOMESTIC FACTORS

The purpose of this research is to study the uncertainty of a country from a newrnperspective. Besides, we also further our study into the determinants of the uncertainty.rnThis study consists of data from sample 20 countries both developed and developingrncountries from 2000 to 2015, using quarterly data for exchange rate while annual datarnfor the independent variables. The reason we used quarterly data for exchange rate isrnthat we will be composing our own exchange rate uncertainty index (EUI) using thernquarterly data. Then, we applied the pooled OLS, Fixed Effect Model (FEM) andrnRandom Effect Model (REM) to analyze the significance of the determinant of EUIrnbased on the panel data. In overall, we found that global factors are significant to EUIrnwhereas domestic factors are insignificant except the country's trade factor. To the bestrnextend of our knowledge, we found that most of the previous researchers have studyrnthe exchange rate using the volatility. So, we intend to establish a new study based onrnthe skewness of exchange rate among developed and developing countries.

Copyright Page. . . . . . . . . . . . ..II

Declaration. . . . . . . . . . . . - .III

Acknowledgements. . . . . . . . . . . .. IV

Table of Contents. . . . . . . . . . . - .V

List of Tables . . . . . . . . . . . . VIII

List of Figures. . . . . . . . . . . . . IX

List of Abbreviations . . . . . . . . . . . .X

List of Appendices. . . . . . . . . . . ..