The three-month dollar interest rate in New York is 4.20% per annum. Alternatively, the three-month euro interest rate in Frankfort is 6.40% p.a. The current $/ spot exchange rate is $1.2120/. The euro three-month forward rate is quoted at $1.2180/.

Use the International Fisher Effect (IFE) to find what should be the expected three-month spot exchange rate of dollars against the euro (If not performing chain calculations, use interest rates up to four decimal places, and again use the proper relationship that describes IFE).