Hi I need help with the following task. The following pair of currency is to be used: GBP/USD.

Research and analyse what will happen to these pair of exchange rates (GBP/USD) using economic indicators in the next 3-6 months. And include a history for the past 6 months which I have made a start on this part and included it below with a graph. Explain the prediction and findings behind the conclusion reached. There is no wrong justification as long as it is explained and can use news/market data for reference. (Eikon, World Bank, IMF, newspaper...)

At least 3 economic Indicators should be used 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, it is required to compare factors relatively e.g., if looking at the AUD/USD and want to analyse interest rates, must compare Australia's interest rate with the US interest rate. In the analysis, if looked at a particular indicator must write why it was believed 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, also 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, state clearly what is believed to happen to the currency pair For example, if analysing AUD/USD and expect the exchange rate to go down, 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.

Below is what I have done as part of the history of the exchange rate in the past 6 months but not sure how to justify it. It would be appreciated if I could please get help to justify this findings. the graph has also been attached below.

Figure 2 shows the British Pound to United state Dollar exchange rate history over 6 months, there has been an overall appreciation in the exchange rate of GBP/USD. It can be seen that the GBP currency reached the highest rate at 1.3381 on 1^st of September 2020. This could be because of the ____. The currency pairs average was 1.2296 over this period with the lowest at 1.1485 on 19^th of March 2020. This depreciation could have been due to the decline in demand of investors because of the possibility of a no deal Brexit.

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