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quality” to the international currency. However, in the Euro crisis, that of the Sterling pound became equally low, while the … deviations across the European currencies in the two crises. Currency-specific money market risk was critical in explaining the …
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Under uncovered interest parity (UIP), the size of the effect on the real exchange rate of an anticipated change in real interest rate differentials is invariant to the horizon at which the change is expected. Empirical evidence using US, euro area and UK data points to a substantial deviation...
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