How does unexpected news about employment affect the exchange rate?

Abstract: The research conducted intends to examine how unexpected changes in employment may affect both exchange rates and interest rates. The results used in the analysis are extracted by running two ordinary least squares regressions with data structured as an unbalanced panel. Furthermore, a two stage least squares regression has been constructed to evaluate how interest rates, instrumented by unexpected outcomes of employment, affect exchange rates through the uncovered interest rate parity condition (UIP). In contradiction to the UIP, relative percentual changes in interest rates had no effect on exchange rates, hence no support could be presented for a causative relationship between unexpected changes in employment and exchange rate movements. In line with previous studies, results are thought to lack significance due to exchange rate movements being measured as the total intraday change, constituting too long of an interval.