Hi I need help with the following questions please Using the following pair of currency pairs GBP/USD.

Based on the exchange rate determinations analyse these exchange rates based on the economic indicators. Analyse what will happen to these pair of exchange rates in the next 3-6 months and explain your prediction and findings behind the conclusion you reach. There is no wrong justification as long as it is explained and can also use news/market data for reference. (Eikon, World Bank, IMF, newspaper...)

use 3 economic Indicators from below:

• interest rates,
• relative inflation rates,
• relative growth rates,
• government interventions,
• exchange rate expectations
• global crisis such as COVID-19

Note that when it says relative, you are required to compare factors relatively e.g., if you are looking at the AUD/USD and you want to analyse interest rates, you must compare Australia's interest rate with the US interest rate. In your analysis, if you have looked at a particular indicator you must write why you believe that this indicator will cause a currency to appreciate or depreciate against another. For example, if the interest rate in the US is higher than in Australia and that the interest rate may increase in the US and you believe it will cause the AUD to depreciate against the USD, you need to explain why this causes depreciation. In addition to examining various macroeconomic indicators (often referred to as fundamental analysis), the historical behaviour of exchange rates can also be analysed to predict future behaviour (technical analysis).

Once analysis is complete, you must state clearly what you believe will happen to the currency pair For example, if analysing AUD/USD and you expect the exchange rate to go down, you should state that the AUD would be expected to depreciate against the USD. Keep in mind that currency appreciation or depreciation happens against another currency.

Thank you!