The real time exchange rate for us dollar http://usd.exchangerates24.com/
Increasing the interest rate generally lowers inflation so the price level change of the U.S. dollar would be less. This means that the exchange rate (USD/GBP) would increase more slowly and less overall than without the interest rate increase.
Well, it is currently completely dysfunctional; if one is an insider, the interest rate is zero, or even negative. For an outsider, the sky is the limit.
Ok, this is my own question. This is what I came up with. can anyone confirm or correct?Maturity r = RR + IP1-YEAR 2.25% = 1.5% + X2.25% - 1.5% = .75%
The real exchange rate between the US dollar and another currency reflects the purchasing power of the dollar relative to that currency, adjusted for inflation. To determine the specific real rate, one would need the nominal exchange rate and the inflation rates of both the US and the other country in question. As exchange rates fluctuate frequently, it's best to consult a reliable financial news source or currency converter for the most current figures.
22. The spot Yen/US$ exchange rate is Yen119.795/US$ and the one year forward rate is Yen114.571/US$. If the annual interest rate on dollar CDs is 6%, what would you expect the annual interest rate to be on Yen CDs?
It is normally higher than the US prime interest rate.
its actually the other way around. the value of the us dollar effects interest rates. the lower the us dollar is worth, the lower the interest rate
The real time exchange rate for us dollar http://usd.exchangerates24.com/
The interest rate in 1975 was between 7.0 per cent and 10.0 per cent. The highest interest rate was from January and February of that year.
Increasing the interest rate generally lowers inflation so the price level change of the U.S. dollar would be less. This means that the exchange rate (USD/GBP) would increase more slowly and less overall than without the interest rate increase.
Improved
A. Kondopoulos has written: 'The impact of interest rate and foreign exchange rate exposure on US financial institutions' stock returns'
It all depends upon the interest rate. The rate will change at least every year, but for planning purposes, use the rule of 72. Divide the interest rate into 72 and that will tell you how long it will take for it to double. If you are getting 4 percent now, and the interest rate does not change in the next 16 years, your intitial 2500 bond would be double. 4/72 equals 16.
2.93%
Well, it is currently completely dysfunctional; if one is an insider, the interest rate is zero, or even negative. For an outsider, the sky is the limit.
An amortization table would give you the answer. If this is a real life situation and you are in the US you would be getting screwed at this rate of interest.