The GBP/USD is an abbreviation for the British pound and U.S. dollar currency pair or cross. The base currency is the British pound and the quote currency is U.S. dollars (American Dollars). This means that one American dollar can buy 0.6171 of a British pound, which is called "pips".
The GBP/USD is a currency that is traded a lot in the world. It can be affected by factors that affect the value of the British pound and/or the U.S. dollar, and it can also be affected by things like interest rates.
The value of the GBP/USD cross could decline when the Fed intervenes in open market activities to make the U.S. dollar stronger. This is because when they make the dollar stronger, it makes it harder for people to buy pounds with dollars, and so people sell their pounds for dollars instead of pounds.
Before the Great Recession, many investors bought currencies like the Australian dollar and the New Zealand dollar because they were high-yielding. This is called a "carry trade."
When trading GBP/USD, you need to understand the US Dollar. This is because the US Dollar is used in 88% of all trades. The US Dollar tends to get stronger when the American economy does well, or when it does badly.
When other economies are doing better than America's, this will tend to make the USD weaker.
The British pound is an important part of the world's economy. It has been the strongest currency in the past and now it is second to the US dollar. The British pound became less important after World War II, but not irrelevant like many other countries.
The Pound has an interesting place in the history of trading. Britain joined Europe's exchange rate system (ERM) in 1990, a "semi-fixed" exchange system that aimed to ease some of the volatility of exchange rates and pave the way for a single currency. Unfortunately, this system did not work and the country experienced recessions.
The British pound is controlled by the Bank of England. Most Western countries have chosen to focus on controlling inflation, but Britain has chosen to focus on keeping it at 2%.
The GBPUSD is one of the world's oldest currency pairs. It has been around since the 19th century. The pair is also called the cable. Years ago, people sent messages between London and New York, via the first transatlantic telecoms cable - hence the name.
The pound sterling is the base rate of the pair. This means that it is what people quote against the US dollar. It has been a very liquid market and has offered forex traders attractive opportunities. The GBP to USD is the third most popular currency pair in the world. It is backed by two of the largest economies.
Day trade the GBP/USD between 0600 and 1600. You can also day trade the GBP/USD only between 0800 and 1000, or 1200 to 1500 GMT. This is a good way to maximize efficiency.
One of the most liquid currency pairs is GBP/USD. The spread and liquidity are good and there is enough volatility to make trading interesting. The pair trades in a wider range on a daily basis than other pairs. Trading it can be profitable, but it also carries more risk.
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