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U.S. presidential cycles and the foreign exchange market
Author(s) -
Ashour Samar,
Rakowski David A.,
Sarkar Salil K.
Publication year - 2019
Publication title -
review of financial economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.347
H-Index - 41
eISSN - 1873-5924
pISSN - 1058-3300
DOI - 10.1002/rfe.1061
Subject(s) - presidency , presidential system , liberian dollar , economics , monetary economics , exchange rate , foreign exchange , us dollar , foreign exchange market , democracy , international economics , political science , law , finance , politics
We examine the association between the foreign exchange rate of the US dollar and US presidential cycles. Results show that Republican presidencies tend to start with a strong dollar, which then depreciates over the course of the presidency. In contrast, Democratic presidencies tend to begin with a weak dollar that then appreciates. These patterns result in an apparent presidential effect in US foreign exchange rates, the direction of which depends on whether exchange rates are measured by levels or by returns.