I need to revise my original answer to this post. I did find this interesting reference that may not be favorable to you.
Actually what it says in this post is:
Coordination with section 988(c)(1)(C)(ii). No exchange gain or loss is recognized with respect to the following transactions -.
(A) An exchange of units of nonfunctional currency for different units of the same nonfunctional currency;
(B) The deposit of nonfunctional currency in a demand or time deposit or similar instrument (including a certificate of deposit) issued by a bank or other financial institution if such instrument is denominated in such currency. This is referring to conversion losses.
Thus gains or losses of CD's are not recognized as Section 988 transactions. Sorry for the misinformation i gave you in my previous post.
{Edited 04/05/23} (4;18 PM PST} @HPP1
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