Schweser Exam Book2 #9 am

Can someone explain why when the interest rate goes up here the currency will increase? Is this just a short term move because everywhere else I see that a higher rate should cause currency depreciation…It makes sense it would go up because of the more attractive return but im getting confused on when a higher rate will cause a depreciation. hopefully this question makes sense considering its 430am

According to my understanding increasing real rate of interest/return appreciate currency. Increasing interest rate just because of anticipated higher inflation rate when real rate held constant , currency depreciates. Int rate = (1+real int) (1+infla) -1 Hope this helps