In a recent editorial (cf. INTERECONOMICS, No. 3/1984, p. 101) Professor Armin Gutowski commented on the surprising increase of the external value of the US dollar which seems to defy traditional explanations of exchange rate determination. The following article presents an American...

I study the pricing of American Depositary Receipts around FOMC meetings to identify the impact of US monetary policy on managed exchange rates. ADR investors assess the domestic central bank’s reluctance to maintain a currency peg regime if the costs of mimicking policy rate increases in the...