In this article we consider the peculiarities of GBP/USD currency pair. GBP/USD is an abbreviation of British pound and US dollar currency pair. The currency pair quote indicates how much money it is necessary to pay in order to buy 1 British pound.
It is very popular trading instrument in Europe and, especially, in Great Britain. It stands third on the list of the most traded currency pairs worldwide, daily trading turnover reaches 12% of the total Forex market turnover. This currency pair is really unpredictable and has strong volatility. Its fluctuations are short-term and unstable. Due to such behavior in the market it was called Cable.
Daily fluctuations of the currency pair reach 130 points on average. Low liquidity of this pair is observed only in the Asian region (average movement is about 30 points). That is why novice traders are not recommended to start with this pair.
Many traders prefer EUR/USD to the Cable. As a rule, British pound moves in the same direction as EUR/USD, but not always.
Pound-dollar movement can be absolutely different from the same euro-dollar in the period when certain “cable” news is released. For example, the British Government changes interest rate through the Central bank. Pound movements are similar to the movements of euro and Swiss franc. One should always be careful trading with pound because nobody knows what surprise it will bring this time. Pound often moves against the news; even when everything seems favorable for the currency, its rate can fall down. Many traders choose this pair for swap trading because of a substantial difference in interest rates of pound and dollar.
It is very popular trading instrument in Europe and, especially, in Great Britain. It stands third on the list of the most traded currency pairs worldwide, daily trading turnover reaches 12% of the total Forex market turnover. This currency pair is really unpredictable and has strong volatility. Its fluctuations are short-term and unstable. Due to such behavior in the market it was called Cable.
Daily fluctuations of the currency pair reach 130 points on average. Low liquidity of this pair is observed only in the Asian region (average movement is about 30 points). That is why novice traders are not recommended to start with this pair.
Many traders prefer EUR/USD to the Cable. As a rule, British pound moves in the same direction as EUR/USD, but not always.
Pound-dollar movement can be absolutely different from the same euro-dollar in the period when certain “cable” news is released. For example, the British Government changes interest rate through the Central bank. Pound movements are similar to the movements of euro and Swiss franc. One should always be careful trading with pound because nobody knows what surprise it will bring this time. Pound often moves against the news; even when everything seems favorable for the currency, its rate can fall down. Many traders choose this pair for swap trading because of a substantial difference in interest rates of pound and dollar.
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