GBP/USD (British Pound/U.S. Dollar)

Filed Under » , , , ,
Dictionary Says

Definition of 'GBP/USD (British Pound/U.S. Dollar) '

The abbreviation for the British pound and U.S. dollar (GBP/USD) currency pair or cross. The currency pair tells the reader how many U.S. dollars (the quote currency) are needed to purchase one British pound (the base currency).

Trading the GBP/USD currency pair is also known as trading the "Cable".
Investopedia Says

Investopedia explains 'GBP/USD (British Pound/U.S. Dollar) '

The value of the GBP/USD pair is quoted as 1 British pound per X U.S. dollars. For example, if the pair is trading at 1.50 it means that it takes 1.5 U.S. dollar to buy 1 British pound.

The GBP/USD is affected by factors that influence the value of the British pound and/or the U.S. dollar in relation to each other and other currencies. For this reason, the interest rate differential between the Bank of England (BoE) and the Federal Reserve (Fed) will affect the value of these currencies when compared to each other. When the Fed intervenes in open market activities to make the U.S. dollar stronger, for example, the value of the GBP/USD cross could decline, due to a strengthening of the U.S. dollar when compared to the British pound.

The GBP/USD tends to have a negative correlation with the USD/CHF and a positive correlation to the EURO/USD currency pairs. This is due to the positive correlation of the euro, Swiss franc and the British pound.

Articles Of Interest

  1.

    Currency Exchange: Floating Rate Vs. Fixed Rate

    Baffled by exchange rates? Wonder why some currencies fluctuate while others are pegged? This article has the answers.

  2. Commodity Prices And Currency Movements

    Find out which currencies are most affected by fluctuations in gold and oil prices, and improve your trading.

  3. 5 Reports That Affect The British Pound

    The pound is one of the world's most popular traded currencies, and is heavily impacted by these factors.

  4. How are international exchange rates set?

    International currency exchange rates display how much one unit of a currency can be exchanged for another currency. Currency exchange rates can be floating, in which case they change continually ...

  5. Profiting From A Weak U.S. Dollar

    Learn how to allocate your investments when the U.S. dollar is down.

  6. 8 Basic Forex Market Concepts

    We go over some of the things you need to understand before you can trade currencies.

  7. Forex: Identifying Trending And Range-Bound Currencies

    Gain a trading edge by learning how macroeconomic forces play out differently for various pairs in the forex market.

  8. A Primer On The Forex Market

    Moving from equities to currencies requires you to adjust how you interpret quotes, margin, spreads and rollovers.

  9. The New World Of Emerging Market Currencies

    Take advantage of foreign currency markets without stepping out of your house.

  10. Why is the British pound / U.S. dollar currency pair known as "trading the cable"?

    The British pound / U.S. dollar currency pair is one of the oldest and most widely-traded currency pairs in the world. The term cable is a slang term used by forex traders to refer to the exchange ...
comments powered by Disqus
Marketplace
Hot Definitions

  1. Racketeering

    Racketeering refers to criminal activity that is performed to benefit an organization such as a crime syndicate. Examples of racketeering activity include...

  2. Lawful Money

    Any form of currency issued by the United States Treasury and not the Federal Reserve System, including gold and silver coins, Treasury notes, and Treasury bonds. Lawful money stands in contrast to fiat money, to which the government assigns value although it has no intrinsic value of its own and is not backed by reserves.

  3. Fast Market Rule

    A rule in the United Kingdom that permits market makers to trade outside quoted ranges, when an exchange determines that market movements are so sharp that quotes cannot be kept current.

  4. Absorption Rate

    The rate at which available homes are sold in a specific real estate market during a given time period.

  5. Yellow Sheets

    A United States bulletin that provides updated bid and ask prices as well as other information on over-the-counter (OTC) corporate bonds...

  6. Bailment

    The contractual transfer of possession of assets or property for a specific objective.
Trading Center