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Calculation Of Change In Spot Rate Of US Dollar And UK Pound

Question

Suppose the current spot FX rate is S0(£/$) = £0.60/$. The consensus forecast for US inflation over the next year is 5%, while the forecast for UK inflation is 3%. By what percentage do you expect the spot rate to change over the coming year?

 

Summary

The question belongs to Finance and it discusses about change in spot rate between US Dollar and UK Pound taking into consideration inflation.

Total Word Count 40

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    Giuseppe

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