Considered one of the most actively traded currency pairs in the world, the GBP/USD has had a renowned status since the United States gained independence from the United Kingdom over 200 years ago. It is said to represent nearly 15% of total Forex transactions by volume.
Did you know that this currency pair is named the “Cable” among traders in the Forex market? This nickname refers to the exchange rate between the GB pound and US dollar which was transmitted across the Atlantic by a cable during the 19th century.
The US dollar replaced the Pound as the world’s reserve currency in the 1940’s. Today however, the British Pound still holds dominancy as it is closely related to Europe and has strong ties with Commonwealth countries such as Canada and India. London maintains a status as an international center of finance, which ultimately strengthens the Pound.
When trading a specific currency pair, it’s important to be aware of the aspects that might determine rates.
The GBP/USD currency pair rate can be highly affected by certain factors, including:
- The strength of the US and EU economies – if the US performs better, the pair will often lose its value; however, when the UK is the higher performer, the pair goes up.
- The state of political stability in each nation – for example, the Pound was heavily affected when Britain announced a referendum to leave the EU. There were strong debates surrounding the UK economy, contemplating whether it would be positively or negatively affected.
- Economic data – traders will often analyze interest rates, inflation and unemployment figures to predict the pair’s direction.
With our latest tools and technology, you can effortlessly trade GBP/USD at Almahfaza. We provide traders with a responsive platform to easily and quickly open and close trades. Traders can also take advantage of Almahfaza’s educational tools and charts that can help in making better trading decisions