Live and Historical GBP/USD Rates
This chart reflects the value of the currency of the British pound (GBP) against the United States dollar (USD) – that is how many USD are needed to purchase one pound. Both the pound and the dollar are major currencies, and as GBP/USD, they form major pair. They do not form a commodity pair. The pair is known as “cable” for the transatlantic cable laid in 1858.
The British Pound
The British pound has both years and strength on its side. It is the oldest currency still being traded in today’s market, and it is one of the strongest currencies as well. The Bank of England which is the governing body of the GBP, is located at the capitol of forex trading in London. The pound is a floating currency and has been since 1971. GBP is very popular as a reserve currency (third) as well as being a popularly traded currency internationally (fourth). Governing officials are depending on the strength of GBP to avoid changing to the euro system, a pressure they have been facings since 1999. Their consistent resistance may pay off as long as the inflation issues GBP faced in early 2008 does not form into a pattern.
The U.S. Dollar
The US dollar is the most widely traded currency in the world. In fact, some commodities like oil and gold are almost completely traded in USD. Twenty-three countries still peg their currencies to the dollar, and at one time, all international currencies were as well. But since the early ’70’s, the US has led the way in establishing a standard of floating currencies. Though USD is considered a floating currency, its governing body (The Federal Reserve) maintains very close control on the value of the dollar through adjustment of the interest rates. Some major US economic sectors are energy, manufacturing, finance, and agriculture.
As one of the largest pairs in volume, GBP/USD represents the close trading relationship between the two influential economies. Naturally, cable has a close correlation to EUR/USD. Because of the high volume and relative stability of both nations, there is low volatility, but there are still trading opportunities-particularly when the Fed announces a change in interest rates. There have also been excellent carry trading opportunities, such as when GBP inflated rapidly in 2008. Whether one trades on this pair or not, it is crucial to keep a close eye on its changes, since these have an influence on all world markets.