Honors College Theses

Publication Date



Economics (BBA)

Document Type and Release Option

Thesis (open access)

Faculty Mentor

Dr. Axel Grossmann and Dr. Mark Yanochik


On June 23rd, 2016, the British public voted to leave the European-Union in a highly contested referendum. The purpose of this thesis is to gain an understanding of whether ‘Brexit’ associated events and announcements had an impact on the US Dollar/Euro, British Pound/Euro and US Dollar/British Pound exchange rates. 69 Brexit associated events or announcements were identified for the study from 1st January 2013 to 31st December 2017. Using a univariate analysis (two-sample t-test in combination with a Levene-test of equal variance) as well as a multivariate analysis (OLS regression), the study examines exchange rate changes during a three-day window surrounding the Brexit events: the event day (day (0)), one day prior to the event (day (-1)), and one day after the event (day (+1)). The results of the univariate analysis show that the referendum day had a statistically significant impact on the exchange rates. The multivariate analysis, which controls for interest rates as well as stock market returns in the domestic and foreign country, provides some statistically significant evidence that the Brexit events impacted the US Dollar/Euro exchange rate as well as the British Pound/Euro exchange rate. However, when removing the referendum day from the other event days, we find that the Brexit events had only a statistically significant impact on the British Pound/Euro exchange rate, while the actual referendum had a statistically significant impact on all three exchange rates.

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Finance Commons