The GBP/USD currency pair, compares the British Pound against the United States Dollar. It is considered part of the majors in the forex market. However, it does significantly less trading volume than the EUR/USD and the USD/JPY.
The British economy is the second largest in Europe, next to Germany. The pound fluctuates primarily based on cross-border trade, mergers and acquisitions between the United Kingdom and Europe. In fact, more than two-thirds of the United Kingdom’s foreign trade transpires with European Union countries.
Even though the GBP/USD only accounts for nine percent of the daily global trading volume, this figure still places this currency pair in third among the majors.
Technicalities of the GBP/USD
The GBP/USD is displayed in the number of dollars it takes to purchase a pound. The pound is the primary currency in the pair and the dollar is the secondary currency. Therefore…
- GBP/USD is traded in amounts featured in pounds
- The pip value, or minimum price fluctuation, is presented in U.S. dollars
- Profit and loss accumulates in U.S. dollars
- In online trading platforms, margin calculations are made in U.S. dollars
The GBP/USD is characteristically known for its extreme price movements and seeming unpredictability. The GBP/USD reacts more abruptly to sudden United Kingdom news and developments, especially economic reports. As a result, there are a number of decisive data reports to watch.
UK Data Reports to Analyze
- Bank of England Monetary Policy Committed rate decisions, speeches by Monetary Policy Committed members and the Bank of England governor
- CPI, PPI, and the British Retailers Consortium shop price index
- Bank of England minutes
- Retail sales
- BRC retail sales monitor
- Bank of England quarterly inflation report
- Royal Institution of Chartered Surveyors house price balance
- Industrial and manufacturing production