I’m doing a Bachelor Thesis on “The Impact of Macroeconomic Factors On Currency Exchange Rates”. Narrowing down towards my methodology section, my professor advised me to analyse about 7 currency pairs to help get a good conclusion on the thesis topic. I want to know how I can do it to find how select macroeconomic factors would impact those 7 currency pairs individually? Will a multivariate regression analysis work in this case? Or else do I have to analyse each currency pair (dependent variable) separately?
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Please clarify your specific problem or provide additional details to highlight exactly what you need. As it's currently written, it's hard to tell exactly what you're asking. – Community Apr 26 '23 at 07:45
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Treating this as panel data and using a two-way fixed effects (FX pair specific and time specific) could be a way forward. See e.g. this thread. – Richard Hardy Apr 26 '23 at 12:28