GDP growth, inflation, interest rates?
interest rate growth is up, inflation stable,
most likely??
it was interest rates, because real interest rates went down.
interest rates dropped, so this could cause depreciation of currency as investors look elsewhere for higher returns, so this is least likely to cause appreciate of currency.
Interest rate = least likely - agree.
was torn on this. Overthought and figured a decline in rates would cause the currency to sell at a forward premium, which would eventually lead to an increase in currency.
eastcoaster9 Wrote: ------------------------------------------------------- > was torn on this. Overthought and figured a > decline in rates would cause the currency to sell > at a forward premium, which would eventually lead > to an increase in currency. I was thinking that too initially, but you’d have to know how rates are moving in the other country, right? since that info wasn’t given i settled for capital flows explanation
just seemed that a rate that doesn’t move (inflation) would likely have little impact… Usually things have to change to have impact. but agreed likely incorrect.
Did I screw this up? I thought interest rate went down, so the currency must appreciate to make up the difference. Inflation was stable so no effect on ccy?
It was interest rates b/c with inflation stable, and the interest rate lower, REAL interest rates were lower.
eastcoaster9 Wrote: ------------------------------------------------------- > was torn on this. Overthought and figured a > decline in rates would cause the currency to sell > at a forward premium, which would eventually lead > to an increase in currency. The thing is… a forward premium can be achieved by… and immediate drop in the currency! It’s like, the rate of return on a stock went up. The result is a fall in the stock price today. NC
interest rates developed countries: interest cut–> currency appreciates emerging countries: interest cut–> currency depreciates
interest rate is falling, so the currency of an emerging country has to fall
I also agree with interest rate
interest rate
interest rate
int rates for me
Interest rate is going down, which will results in currency appreciation. Inflation is stable at 3.3%, least likely for more currency appreciation. I chose inflation.
agree with aegis. i choose inflation as it was flat so it is LEAST likely to affect currency fluctuation. dun see how it could be int rate, lower i/r will boost capital flight out of the country and money ss would shrink hence currency appreciate.