U.S. Presidential Cycles and the Foreign Exchange Market
44 Pages Posted: 11 Apr 2019
Date Written: March 18, 2019
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.
Keywords: US dollar; foreign exchange markets; Presidential cycles; politics and finance
JEL Classification: F310, F400, G150, G180, E650, P480
Suggested Citation: Suggested Citation