Abstract, to be done.

We develop a novel identification strategy that combines sign and policy coefficient restrictions to estimate the exchange rate response to U.S. monetary policy shocks. Central to our approach is a restriction grounded in historical narratives: monetary policy systematically tightens following a depreciation of the U.S. dollar. This assumption, particularly relevant during the Volcker era, yields results consistent with exchange rate overshooting and a conditional form of uncovered interest parity. Unlike standard sign-restriction methods, our strategy delivers robust impulse responses across regimes, including both the Volcker and post-Volcker periods.