GBPUSD: Hail Britannia

GBPUSD: Hail Britannia

Macro FX

Saxo Group

Summary:  Welcome to the land of crumpets, the Queen and a classic currency, the British pound. The pound sterling is the official currency of the United Kingdom, as well as its overseas territories such as Bermuda, Gibraltar and the Cayman Islands. As the fourth-most traded currency in the world, the pound accounts for 12.8% of daily trades.


GBPUSD is the abbreviation used for the British pound and US Dollar currency pair. When you travel, you might see the exchange rate between these two currencies quoted by banks or foreign exchange desks – the value of GBPUSD will be quoted as 1 British pound (the base currency) per X US Dollars (the quote currency). So, if the quote is 1.42, you’ll pay 1.42 US Dollars for 1 pound sterling.

One of the world’s major currency pairs, GBPUSD is driven by economic indicators in the UK and the US, such as inflation rate data or employment reports, as well as interest rate decisions from the Bank of England (BoE) and the Federal Reserve – all these factors will affect the value of the pound and US Dollar in relation to each other and send GBPUSD higher or lower.

Some of these movements have been dramatic – for example, in June 2016, sterling was pounded following Britain’s vote to leave the European Union. Worries over Brexit’s impact on the British economy caused many investors to sell their pounds and with supply suddenly exceeding demand, the pound dropped 10% in one trading session!

AKA the cable

Like all the major currency pairs, GBPUSD has its own friendly nickname, one steeped in the history connecting Britain and the US. Since the 19th century, traders have referred to this pair as ‘cable’, a reference to the transatlantic cable laid in 1866 which first transmitted currency prices between the exchanges in London and New York City. So, if you trade the ‘cable’, you’re part of a grand tradition in foreign exchange.

Trade GBPUSD your way

With Saxo, you can trade GBPUSD and other FX pairs with true flexibility. Buy and sell currency pairs with Spot FX, get a jump on future prices with FX options or hedge your exposure with FX swaps.

Please note that FX related instruments are traded with leverage and small price fluctuations can lead to larger losses if market volatility increases. FX markets are sensitive to political and macroeconomic events, which can drive prices higher or lower rapidly. Therefore, you should ensure that you understand the risks before trading.

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)

Saxo Markets
40 Bank Street, 26th floor
E14 5DA
London
United Kingdom

Support Centre
For existing clients, please click here to request support via the Support Centre.

Have a question about our products, platforms or services? Visit the Support Centre to find answers for our most frequently asked questions. If you are still unable to locate an answer to your question, you will also find contact details for your local Saxo office to speak with a representative.

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo Markets is a registered Trading Name of Saxo Capital Markets UK Ltd (‘SCML’). SCML is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo Markets assumes no liability for any loss sustained from trading in accordance with a recommendation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc.