I am a bit thrown off by the relationships between inflation, rates, currency appreciation/depreciation and exchange rates. I have put together the following statements and I was wondering if they were correct? If anyone could add any pertinent/useful information to them, that would be great. Thank you in advance.
If inflation in country X increases vs. country Y, currency in country X will appreciate relative to country Y. There is an inverse relationship between exchange rates and interest rates in two different countries. Continue reading