What is expected relation between relative interest rates

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1. Effects of real interest rates. What is the expected relationship between the relative real interest rates of two countries and the exchange rate of their currencies?

2. Speculative effects on exchange rates. Explain why a public forecast about the future value of the euro by a respected economist about future interest rates could affect the value of the euro today. Why do some forecasts by well-respected economists have no impact on today's value of the euro?

Reference no: EM13936327

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