Changes in the Forward Rate Assume that interest rate parity exists and will continue to exist. As of this morning, the one-month interest rate in the United States was higher than the one-month interest rate in the eurozone. Assume that as a result of the European Central Bank’s monetary policy this afternoon, the one-month interest rate of the euro increased and is now higher than the U.S. one-month interest rate. The one-month interest rate in the United States remained unchanged.
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