Question: The spot bid-offer rates between Australian dollar and pounds (GBP/AUD) is quoted as 0.5144 - 0.5149. Speculator A expects the exchange rate to be 0.5130

The spot bid-offer rates between Australian dollar and pounds (GBP/AUD) is quoted as 0.5144 - 0.5149. Speculator A expects the exchange rate to be 0.5130 - 0.5140, whereas Speculator B expects the exchange rate to be 0.5150 - 0.5155, in two months from the initial quotes.

a) Based on the expectations of the two speculators, which currency will appreciate and which currency will depreciate from the view of Speculator A, and Speculator B?

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