Hey Marc,
Since you are a big follower of AU, I thought I would run my first UIRP (Uncovered Interest Rate Parity) Condition analysis on AU. For UIRP equation E(FXn) = FX0((1+IR AU)/(1+IR US)^n
FX0(not) is equal to spot
E(FXn) is equal to expected rate at time n
N is equal to time period
IR AU is equal to the AU Interest Rate
IR US is equal to the US Interest Rate
Using .0833 as my n or 1 month the E(FX(.0833)) is at .931031
2 month is .934071
3 month is .937121
This is all assuming no IR changes.
I just got bored and though I would test out 1 month AU rate
Since you are a big follower of AU, I thought I would run my first UIRP (Uncovered Interest Rate Parity) Condition analysis on AU. For UIRP equation E(FXn) = FX0((1+IR AU)/(1+IR US)^n
FX0(not) is equal to spot
E(FXn) is equal to expected rate at time n
N is equal to time period
IR AU is equal to the AU Interest Rate
IR US is equal to the US Interest Rate
Using .0833 as my n or 1 month the E(FX(.0833)) is at .931031
2 month is .934071
3 month is .937121
This is all assuming no IR changes.
I just got bored and though I would test out 1 month AU rate