Monetary policy is a major factor influencing the GBP/USD as proven by one of the major highlights of the pair. During the 2007/08 global financial crisis, the pair hit highs of 2.11 and lows of 1.426.

All these extremes were posted in the 1980s. Aside from those highlights, GBP-USD has historically hit all-time highs of 2.466 and all-time lows of 1.05. The GBP/USD lost over 10% in one day after headlines came out that the UK had indeed voted to exit the EU. A more recent highlight would be the 2016 Brexit vote that ensured Britain’s exit from the European Union. In 1992, on 16th September, a day referred to as Black Wednesday, the GBP/USD tanked 25% as Britain left the European Exchange Rate Mechanism. Since the GBP-USD started trading, it has had major highlights in its history. The GBP/USD has always been referred to as the Cable, referencing the first transatlantic communication cable that connects the UK and US, and which was used to transmit exchange rates between the countries. The pound comes in third, just behind the euro (EUR). Currently, the US dollar is the currency most held in reserve around the world. It was not until the dissolution of the system in 1971 that currencies began floating freely against each other in the markets. The US dollar later caught up with the pound in the 1920s, and by 1944, in tandem with the global implementation of the Bretton Woods monetary system, the British pound became pegged to the US dollar. It is Britain that colonized the United States, and the pound sterling dominated world finance before World War 1 erupted in 1914, with over 60% of global debt held in the currency. The GBP USD has an interesting history, as it represents currencies that have, at different times in history, been the world’s de facto reserve currency. This means that the price of the GBP-USD at any given time represents the amount of US dollars it would take to exchange for one British pound. The GBP/USD currency pair has the pound sterling as the base currency and the US dollar as the quote currency.

Aside from being one of the oldest tradable pairs, the GBP/USD is also very liquid and offers traders significantly tighter spreads than the minors. Each of the pairs in the majors’ category, feature the USD. GBP-USD belongs to the ‘majors’ group in Forex, which represent the currency pairs with the highest daily trading volumes. GBP/USD is the ticker for the British pound to the US dollar exchange rate.

Gbp to usd