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Expectations suggest about future exchange rates

Question:

If investors in the United States and Canada require the same real interest rate, and the nominal rate of interest is 2 percent higher in Canada, what does this imply about expectations of U.S. inflation and Canadian inflation? What do these inflationary expectations suggest about future exchange rates?

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Finance Basics: Expectations suggest about future exchange rates

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Finance Basics: Expectations suggest about future exchange rates

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