Assume that the EUR/USD exchange rate is at 1.20 $/ €. Interest rates are at 5 % in the United States and at 0 % in the euro-area. Given that uncovered interest rate parity holds and that the expected exchange rate does not change, what would be the new exchange rate if the European Central Bank increases the interest rate for the euro-area to 10 %? Please state the exchange rate in USD per EUR. Answer: