MACROECONOMICS U.S. Presidents (1969 to 2017)
Richard Nixon (January 1969 to August 1974): Percentage change in U.S. dollar: -16.23%
Gerald Ford (August 1974 to January 1977): Percentage change in U.S. dollar: +2.23%
Jimmy Carter (January 1977 to
January January January 1981): 1989): 1993): change in U.S. dollar: -10.28%
Ronald Reagan (January 1981 to
change in U.S. dollar: +9.79%
George H.W. Bush (January 1989 to
change in U.S. dollar: -8.68%
Bill Clinton (January 1993 to January 2001): Percentage change in U.S. dollar: +30.80%
George W. Bush (January 2001 to
January January change in U.S. dollar: -29.13%
Barack Obama (January 2009 to
2017): change in U.S. dollar: +24.72%
Assuming the ‘party over President’ theme holds true in this case and that the core values of the Republican party are to dominate the major policy decisions going forward I thought it would be a worthwhile exercise to review the historical performance of the U.S. dollar during various Republican administrations to see whether there were any common themes which could affect the value of the currency. Here’s what I discovered.
Since Nixon’s landslide victory and inauguration in 1969 there have
Chart 1. Eurozone currencies against the U.S. dollar since 1968 Source:
FXtop.com FX TRADER MAGAZINE July - September 2017 33 Percentage 2009): Percentage Percentage Percentage Percentage
been eight U.S. presidents prior to the current incumbent. I list them here along with the accompanying percentage change in the dollar as measured by the U.S. dollar exchange rate versus the Euro since inception in 1999 and its constituent parts prior to inception.
Chart 1 highlights the trend in the currencies of the Eurozone against the U.S. dollar from the late-1960s to date.
It shows a slight upward bias in the trend (downward bias for the USD) since 1985 when the G5’s Plaza Agreement halted the steep rise in the value of the dollar seen during the early Reagan years. While the bias has on balance been for a lower dollar over the whole period it is
FX
worth noting that there have been a number of significant price swings of large duration which provided opportunities for the global macro investor. Note that the decline (U.S. dollar advance) which has been in effect since 2008 has held above the trendline coming in from the 1985 and 2000 lows – a positive sign for the market technicians among us.
Putting these price swings into the context of who was in the White House at the time, a very interesting fact stands out. Te dollar has tended to fall when a Republican has been the incumbent with three out of the five Republican presidents presiding over a decline in the currency while only one of the three Democratic presidents (Carter) were at the wheel while the dollar fell.
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