GBP/USD – Live and Historical Rates
Known as the “cable”, the GBP/USD pair is indeed a major, though it isn’t a commodity pair. Both currencies involved are obviously majors on their own too. The chart above illustrates the amount of USD it takes to purchase a GBP.
The British Pound is definitely a major and a worthy peer to the USD in this pairing. It is the oldest currency in the world, still in circulation, it is the 4th most traded currency and it is the third most popular reserve currency after the USD and the EUR. Britain has for years resisted adopting the Euro and now, with the Brexit procedure already launched, it has become clear that the GBP is indeed here to stay. The GBP is also the strongest currency in the world, despite some inflationary tendencies as of late. The governing authority of the GBP is the Bank of England.
The US dollar is the world’s most traded currency by far, as well as the largest reserve currency. Also called the petro-dollar, it is the currency in which most commodities – like gold and oil – are almost exclusively traded. The US dollar is the standard to which most of today’s international currencies were pegged at one point or another. To this day, the currencies of 23 countries as still pegged to it. The entity controlling the USD is the Federal Reserve, which exercises its control through the manipulation of interest rates.
The USD is backed by the largest single economy in the world. Commodities, manufacturing, energy and finance are all major components of the US economy.
Because of Britain’s geographical proximity to the Eurozone and the economic ties it has with the EU in general, the GBP/USD pair is closely correlated with the EUR/USD. The volatility associated with the Cable is usually low. Trading opportunities are sometimes created by the Fed’s interest-rate related announcements.
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