Carry Trade and the Pandemic

Carry Trade and the Pandemic
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From the previous rates of exchange and the economy's stability, it is almost impossible to predict the future of the exchange rates. For example, between 2018 and 2019, the exchange rates were not remarkably constant, fluctuating every month. In January 2019, the actual exchange rate for AUD/USD was 1.37 with an interest rate of 2.01 for USD. The forecasted foreign exchange rate was 1.418, resulting in a rate of 1.41 in February 2019. As much as the deviation in the forecasted foreign exchange rate might appear minimal, it shows that the inconsistency reduced the accuracy of the value of foreign currencies and the exchange rates. Therefore, the forecasted exchange rate is not reliable to some extent (Ince & Molodtsova, 2017).
The interest rates in USD and AUD also vary significantly across the months. For example, while the USD interest reduced from 0.1416 to 0.1400 in February 2018, the rate for the AUD increased from 0.1191 ...