Suppose The Dollar Interest Rate And The Pound Sterling

Suppose The Dollar Interest Rate And The Pound Sterling. Expected dollar/pound exchange rate is higher than the current one. Suppose the dollar interest rate and the pound sterling interest rate are the same, 5 percent per year.

GBP USD Digests HigherThanExpected US Inflation Reading from www.poundsterlingforecast.com

Calculate the covered interest differential in. What is the relation between the current equilibrium dollar/pound exchange rate and its expected future level? Suppose the dollar interest rate and the pound sterling interest rate are the same, 6 percent per year.

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