If the dollar begins trading at $1.45 per euro, with the same interest rates given in problem 3, and the ECB raises interest rates so that the rate of the euro deposits rises by 2%, what will happen to the exchange rate (assuming that the expected future exchange rate is unchanged)?

Data From Problem 3

If the interest rate is 8% on euro deposits and 4% on dollar deposits, while the euro is trading at $1.45 per euro, what does the market expect the exchange rate to be one year from now assuming the IPC holds?