Coursework:

After 3 years of struggling with Brexit, the UK parliament voted in favour of PM Johnson's withdrawal agreement. It means the UK will split from the block on January 31, when a transition period starts in that both sides have 11 months to agree on their future relationship.

Question:

Discuss with illustration "Assuming a trade deal between European union and the UK after the Brexit", what will be the effect of Brexit on the value of GBP/USD in short term (i.e. 1 to 3 month) and long-term (i.e. 3 months to 1 year) after ending the transition period (i.e. 31 Dec 2020), when the UK officially will be an independent economy from the block.

Hints:

1-You need to justify your prediction clearly using academic theories (i.e. international parities; the effect of

balance of payment on the exchange rate, etc.)

2- For this pair (i.e. GBP/USD), you need to consider the economy of the US as well.