The foreign exchange (FX) market is in equilibrium when the domestic and foreign returns are equal. Suppose the dollar interest rate is 5%, the euro interest rate is 3%, and the expected future exchange rate (one year ahead) is 1.224 $/. What is spot exchange rate under new equilibrium in the short run in case of a higher domestic interest rate, is = 7%? What is spot exchange rate under new equilibrium in the short run in case of a lower foreign interest rate, le = 2% ? A lower expected future exchange rate, Esve = 1.19 $/? The foreign exchange (FX) market is in equilibrium when the domestic and foreign returns are equal. Suppose the dollar interest rate is 5%, the euro interest rate is 3%, and the expected future exchange rate (one year ahead) is 1.224 $/. What is spot exchange rate under new equilibrium in the short run in case of a higher domestic interest rate, is = 7%? What is spot exchange rate under new equilibrium in the short run in case of a lower foreign interest rate, le = 2% ? A lower expected future exchange rate, Esve = 1.19 $/