Kozorez has a position in Spanish sovereign bonds that he wants to hold during the next year because he believes euro rates will rally as the European Central Bank continues with its quantitative easing program. He is less hopeful, however, about the EUR currency, which he wants hedged back to USD. The US risk- free rate is 0.27%, and the euro zone risk- free rate is 0.94%. Nils also uses the following data for his analysis.

Exchange rates
	USD/EUR	EUR/USD
Spot	1.1156	0.8964
Forward	1.1104	0.9006

Calculate the forward rate of USD/EUR and also identify that is it trading at fair value/above/below