Assuming a trade deal between both sides, in your 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.

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. 

Answer rating: 100% (QA)

1 ShortTerm Effects 1 to 3 months In the short term the value of GBPUSD may experience volatility and uncertainty due to the immediate impact of Brexit Examples of theories to consider a Expectations ... View the full answer