GBP/USD - the ratio of the British pound and US Dollar
Designation
The symbolic designation is£, pound sterling. The dimension is one decimal place; after the decimal point, depending on the broker, 4 or 5 characters (1,22481).
Features
The British Pound sterling against the US dollar is one of the oldest currency pairs in the world. The pair is often called the "cable" in honor of the first transatlantic communication cable laid on the bottom of the Atlantic Ocean, connecting Great Britain with the United States. It was used to exchange prices for currencies between the economies of the two countries. "Cable" remains a favorite of traders today, causing great interest, given the size of the UK economy.
The national currency of the United Kingdom, played one of the main roles in the market Forex. Since the XVIII century, it was part of the reserve currencies of the countries ' Gold and foreign exchange reserves and was a parallel currency for the territories under the jurisdiction of the crown. In the XX century, after the Second World War, it was replaced, like many other currencies, by the US dollar, and after the creation of the EU, it became the third currency in terms of importance, turnover of mutual settlements and demand.
The main feature of the pound sterling is an unprecedented drop quotes, the weakening of the currency occurred against the background of the decision of the Referendum on the initiation of the procedure for the UK's withdrawal from the EU. The negative consequences exceeded any expectations of experts, resulting in two stages of decline of the exchange rate, the first on the fact of the announcement of the voting results, the second on the low liquidity and the lack of effective steps on the part of the newly elected authorities.
Another feature of this currency is the difference in the management financial structure: the monetary policy is managed by a Committee of the same name. The Bank of England is represented in it by the Head, who is also the Chairman of the Monetary Policy Committee. Unlike independent decisions in this area in other Central Banks of developed countries, the parameters of the UK's monetary policy are determined by the Government. Currency interventions and other operations on the financial markets are carried out by the bank itself.
Traders include the British pound in their portfolio, diversifying their trading with the pair EUR/USD, which has a significant correlation with GBP/USD, building quasi-arbitrage strategies.
The attractiveness of the pound sterling consists in a higher volatility when reacting to news. "Local" decisions on the interest rate, national GDP, unemployment and other important economic indicators can cause a significant increase in the amplitude of fluctuations in quotations.