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The following data are taken from the financial market pages of an Australian newspaper. Forward Margins Forward Contract Forward Margins (Buy A$/Sell A$) 1 month

The following data are taken from the financial market pages of an Australian newspaper.

Forward Margins

Forward Contract Forward Margins (Buy A$/Sell A$)
1 month 0/1
2 months 1/2
3 months 1/3
6 months 2/4
1 year 0/1
2 years -16/-8
3 years -51/-11

The data under the Forward Margins column represent the forward contracts for the US dollar with respect to the Australian dollar (given in points form).

A) What do the forward rates indicate in terms of whether the A$ is expected to strengthen or weaken with respect to the US dollar?

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