What does gbpusd mean

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List of Partners vendors. The slang term "trading the cable" is used by forex traders to refer to an exchange between British pounds and U.

The word " cable " may refer to the exchange rate between the pound and the dollar, and may also simply refer to the British pound. The phrase "trading the cable" has its origins in the midth century when transatlantic telegraph service revolutionized international communications.

Messages between New York and London could be transmitted by a physical cable that stretched across the ocean floor between the two nations.

It was some years before reliable transatlantic service was in place. Since that time, the exchange rate between the British pound and the U. The pound may be called the cable only when it is paired with the USD, not with any other currency. The forex, or foreign exchange, is now a global marketplace for the exchange of nearly all global currencies. It has no headquarters or central location. Currency transactions are conducted electronically between traders around the world, 24 hours a day.

Most participants in this market are investment banks or commercial banks, along with some individual currency traders. Your Privacy Rights. Trade now. Go to market page. The British pound to US dollar exchange rate is one of the most liquid currency pairs in the FX market. It is one of the most cash-rich currency pairs available as well as being the third most traded major currency pair globally.

In this market, the pound sterling is the base currency, and the US dollar is the quote currency. In , the pound became a free floating currency, as the Bretton-Woods system slowly collapsed. At the same time, the US dollar became free floating, and the US decided to drop the gold standard.

As a general rule of thumb, since the pound was allowed to free-float against the dollar, the nominal value of the pound depreciated over time, leading people to believe that the pound was slowly weakening. However, when adjusted for inflation, you get a slightly different picture.

Research conducted by Prof. Elroy Dimson, Prof. There is a plethora of factors that will have an effect on the two currencies, in general, and relative to each other over the long term. Changes in: GDP, employment, interest rates, inflation rates, and political shifts within the domestic economy will affect the relevant currency respectively.

Communications from both central banks can be one of the biggest determinants of the currency pair value. A factor specific to the pound sterling at the moment is Brexit. Plus, of course, it is one of the oldest tradable currency pairs on the market. A CFD is a financial instrument typically between a broker and an investor, where one party agrees to pay the other the difference in the value of a security, between the start and end of the trade.

You can either hold a long position speculating that the price will go up or a short position speculating that the price will fall. This is considered a short-term investment or trade as CFDs tend to be used within a limited timeframe. If you think the pound will appreciate then take a long position by buying the CFDs.

If you think the pound will lose value versus the US dollar then you would take a short position by selling CFDs. Looking for a reliable CFD trading provider? Try our award-winning trading platform or download our mobile app, which will become your smart CFD trading assistant. Advanced AI technology at its core: a Facebook-like news feed provides users with personalised and unique content depending on their preferences.

Well, when this pair breaks it tends to break quite strongly one way or the other. This makes it attractive for day traders and in the London morning it is a big part of the daily trading volume.

A large portion of the historical Forex rates between the two currencies have been governed by the gold standard. This was when both the US and the UK moved to floating exchange rates. Jumping forward to brings us to the Brexit vote. We can see from the historical data from that period just how pronounced the effect of the leave vote was on the value of the Pound. In fact, it was the weakest the Pound-Dollar rate has been since the low from The crucial difference is that in the s it was more about Dollar strength, whereas the move in June was all about Sterling weakness.

The most important ones are:. Inflation differentials: consistently lower inflation rate are typically correlated with a rising currency value, as the lower the inflation, the higher the purchasing power of a currency. Countries with higher inflation typically see their currency depreciated against other currencies. High inflation rates are usually accompanied by higher interest rates.

Nevertheless, when inflation rate is not particularly high, a mild increase could hint a future interest rates hike by the central bank, which makes domestic stocks and bonds more attractive to international investors. In order to buy them, investors need to have more currency and by the meaning of the simple demand-supply law, that currency appreciates. Interest rates differentials: By taking decisions upon interest rates, central banks exert an indirect influence over both inflation and Forex markets, and changing interest rates impact inflation and currency values.