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U.S. presidential cycles and the foreign exchange market

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Listed:
  • Samar Ashour
  • David A. Rakowski
  • Salil K. Sarkar

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.

Suggested Citation

  • Samar Ashour & David A. Rakowski & Salil K. Sarkar, 2019. "U.S. presidential cycles and the foreign exchange market," Review of Financial Economics, John Wiley & Sons, vol. 37(4), pages 523-540, October.
    • Handle: RePEc:wly:revfec:v:37:y:2019:i:4:p:523-540
    DOI: 10.1002/rfe.1061
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