The symbol GBP/USD stands for the British pound – United States dollar pair. The currency pair quote shows how many U.S. dollars should be paid in order to buy 1 British pound. GBP/USD is a very popular trading instrument in Europe, especially in Great Britain. It occupies the fourth position in the top of the world's most traded pairs, as its daily turnover amounts to about 12% of the total currency market volume.
The pair is very volatile and it is hard to predict its movements. The price fluctuations are of short-term and very abrupt character. Thus daily fluctuations can vary within approximate 130 pips. Low pair liquidity is observed only during the Asian session (average movement is about 30 pips).
Numerous traders prefer trading EUR/USD rather than GPB/USD. As a rule, the British pound is moving in the same direction as the EUR/USD pair, however, not always. The behaviour of GPB/USD can differ much from the movement of the euro – U.S. dollar pair at the time of certain cable news releases (the GPB/USD pair was sometimes called “cable” as in the 19th century the connection between London and New York stock exchanges was made with the help of transatlantic telegraph cable). For example, the Bank of England's changing the interest rate is reflected in the GBP/USD rate.
The pound dynamics is similar to that of the euro and Swiss franc movement. Trading the pound, it is always necessary to be attentive, as price fluctuations are considerable especially in cross-rates with the pound. GBP/USD often goes against the news, even when everything seems to be good for the currency, its rate can be downfalling.
