The article explores how different economic factors affect exchange rate volatility in countries with varying income levels. By analyzing data from 1995 to 2015, the researchers found that macroeconomic indicators significantly influence exchange rate behavior. They discovered that exchange rate volatility and level are determined by these indicators, with sensitivity varying based on a country's income level. This study confirms that macroeconomic fundamentals play a crucial role in shaping exchange rate fluctuations and levels, providing valuable insights for policymakers.