GBPUSD GBP/USD

The British Pound is one of the major leading currencies. It is heavily involved in international transactions and settlements. GBP is included in the U.S. Dollar index (DXY) with a share of 11.9%, the third largest share after the Euro and the Yen. GBP/USD in one of the majors in the currency market. The other name for the pair is the Cable. This nickname emerged in the middle of XIX century, when GBP/USD quotes were translated via a trans-Atlantic cable. The pair has some unique features:
- Brokers usually offer best conditions for traders to trade GBP/USD with minor spreads and fees. The pair sometimes has positive swaps that can be used to get some more profit;
- Trading is accompanied by huge liquidity. Thus, the pair is very “technical,” meaning that technical analysis could be exercised with high accuracy. Thus, it is very popular among individual traders;
- Moving factors behind the USD are stronger and play a decisive role in the pair’s movements. Thus, dollar-related drivers should be monitored very carefully, including the actions of the U.S. Federal Reserve;
- Macroeconomic data in the United Kingdom, like Gross Domestic Product (GDP), inflation, the Purchasing Manager’s Index (PMI), unemployment, and the actions of the Bank of England, move the pair from the Pound’s side;
- The Pound is not a commodity-driven currency, neither is it a safe haven asset. Thus, changes in risk appetite have minor effects on the pair from the Pound’s side; - The Cable is heavily linked to the Euro as the British economy has vast exposure to Europe. Financial services in the U.K. are also bound to Europe. However, neither currency plays a leading role here. Any currency can take this role depending on the market situation;
- European and American hours are the most favorable to trade the Cable, or cross rates with the Pound. Trading on the Pound drops during night hours and is subject to minor volatility.