摘要：This paper walk around the impact of news sentiments on foreign exchange market in context of Pakistan. To conduct the research, the selected currency pair is USD/PKR as it is the most traded currency pair in context of Pakistan. The research model is based on event study approach. Event window is created of 21 days, ten days before and 10 days after the event. Sample contains mix of scheduled and unscheduled news. Data is collected from the period of 1997 to 2018, containing five announced election results and one unscheduled news (terrorist attack). The objective of the study is to explore whether Pakistan’s foreign exchange market is open to news or not and up to which extent Fama, 1971 efficient market hypothesis exist in FX market in context of Pakistan. Study found insignificant results in late nineties but with passage of time in early 2000, impact of news sentiments found significant on exchange rates. It depicts that Pakistan’s foreign exchange market is moving toward efficiency with the passage of time. This study will be significant for academia, policy makers and investors.
