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In this era of new revolution of globalization and trade liberalization, exchange rates (ER) are one of the fundamental factors in international trade. This research focus on the determinants of trade i.e. Import, export, industrial growth, consumption level and oil prices fluctuation brings changes in exchange rate and its influence eventually on balance of payments in China. Data was collected on annual basis for thirty one years. By applying cointegration, it is estimated that there exist a long run relationship. China has significantly and correctly signs the short run dynamic. Exchange rate does not Granger cause balance of payment and balance of payment does not granger cause exchange rate. In conclusion, we found that the balance of trade, economic growth factors and oil price brings changes in exchange rate. Furthermore, we found the unilateral or bilateral effect of balance of payment and exchange rate. Moreover, apart from the selected determinants of trade, there are many other macroeconomic factors (inflation rates, interest rates, speculation, change in competitiveness, relative strength of other currencies and government debt) and microeconomic factors (political stability position and regional relationship) which may also play role in determination of exchange rates.

Affect of increase and decrease in balance of trade is observed in determination of balance of payments of country. Balance of payment and exchange rate has significant relationship with each other. This research investigates that the determinants of trade i.e. Import, export, industrial growth, consumption level and oil prices fluctuation brings changes in exchange rate and its influence eventually on balance of payments in United state of America (USA). Data of defined variables is collected on annual basis for thirty one years. By applying cointegration, it is estimated that there exist a long run relationship. USA has significantly and correctly signs the short run dynamic. Exchange rate does not Granger cause balance of payment and balance of payment does not granger cause exchange rate. In conclusion, we found that determinatnts of balance of trade affect the exchange rates, also, these rates have an considerable effect (positive or negative) on balance of payments. Therefore, for the macroeconomic stability within a country; economists, policy makers and government should collectively device appropriately matched and synchronized monetary, trade and fiscal policies which stabilize the exchange rate and sustain the balance of payment objectives.

In the area of international trade few studies have examined whether fluctuation in exchange rate is base on macro variables that are used in this study. Basically the study is conducted in Pakistan. As it has been noticed that there is continuously increasing in exchange rate since last 20 years. This paper investigate that foreign direct investment, inflation and supply of money have strong relationship with exchange rate. This means that if there is increase in foreign direct investment then the exchange rate will decrease, if there is increase in supply of money then the exchange rate will grow and if there is increase in inflation then the exchange rate will increase and vice versa.

Exchange rate is a significant factor in international macroeconomics; it affects are witnessed in the recent past on different currency crises in many economies and has attracted focus of policy makers around the globe. But the question is can the exchange rate policy really be used to influence trade flows? Whether we really can say what effect on trade balance a depreciation or appreciation of exchange will have? Is the connection between exchange rate, trade balance and balance of payments is strong enough for us to be able to base a policy on it? So, this research study focuses on the above questions for United Kingdom (UK) economy. Data of defined variables is collected on annual basis for thirty one years. By applying cointegration, it is estimated that there exist a long run relationship. UK has significantly and correctly signs the short run dynamic. Exchange rate does not Granger cause balance of payment and balance of payment does not granger cause exchange rate. In conclusion, we found that determinatnts of balance of trade affect the exchange rates, also, these rates have an considerable effect (positive or negative) on balance of payments.

Consumption is positively correlated with disposable income, due to higher oil prices a fall in disposable income will decreases consumption and production and adverse impact on growth. If investment decisions are concerned increase in oil prices will increase cost of production and lowers profit margin and investment. This paper seeks to identify the impact of exchange rate volatility and oil prices fluctuations on economic growth in France based on annual data for fourty years. Impact of oil prices and exchange rate volatility on economic growth has been significant. Cointegration technique is applied to check exchange rate volatility has been significant. Engle and Granger cointegration technique applied and the impact of oil prices and exchange rate volatility on economic growth is checked. Engle Granger results indicate that relationship is significant in the long run and its error correction adjustment mechanism (ECM) in short runs is significant and correctly signed for France.