If markets expect interest rates in the United States to increase above interest rates in Europe, assuming that all else remain constant, then it depends on the forward exchange rate that U.S. Federal Reserve officials and their European Central Bank counterparts agree to set differences in interest rates in the U.S. and Euro do not affect exchange rates the U.S. dollars per Euro forward exchange rate will be higher than the U.S Dollars per Euro spot exchange Rate the Euros per U.S. Dollar forward exchange rate will be higher than the Euros per U.S. Dollar spot exchange Rate