- C . 25. The following are expected inflation rates and interest rate changes for the respective currencies: Factor US Australia Malaysia Currency Dollar Australian Dollar Ringite -5% -3% Change in interest rates -7% 4% Change in inflation rates -2% +3% Suppose the foreign exchange flows between the US and Australian, and Australia and Malaysia are primarily trade-related, while flows between the US and Malaysia are predominantly financial in nature. Obtain predictions of the 3 exchange rate movements (i.e., predict the appreciation or depreciation of one currency against another)