U.S. Presidential Cycles and the Foreign Exchange Market

44 Pages Posted: 11 Apr 2019

See all articles by Samar Ashour

Samar Ashour

University of Arkansas

David A. Rakowski

University of Texas at Arlington

Salil K. Sarkar

University of Texas at Arlington

Date Written: March 18, 2019

Abstract

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

Ashour, Samar and Rakowski, David A. and Sarkar, Salil K., U.S. Presidential Cycles and the Foreign Exchange Market (March 18, 2019). Review of Financial Economics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3354754

Samar Ashour

University of Arkansas ( email )

Fayetteville, AR 72701
United States
4795754505 (Phone)

David A. Rakowski (Contact Author)

University of Texas at Arlington ( email )

Box 19449 UTA
Arlington, TX 76019
United States

Salil K. Sarkar

University of Texas at Arlington ( email )

415 S West St Apt no 205
Arlington, TX 76013
United States

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