Question: Suppose the current spot FX rate is S0(/$) = 0.60/$. The consensus long-term forecast for US inflation is 5% per year, while the long-term forecast

Suppose the current spot FX rate is S0(/$) = 0.60/$. The consensus long-term forecast for US inflation is 5% per year, while the long-term forecast for UK inflation is 3%. By what percentage do you expect the spot rate to change over the coming year?

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