GBP/USD Pair

Why is the GBP/USD pair so popular?
One of the major currency pairs that can be purchased and sold on Forex is the British pound sterling against the US dollar. Nicknamed the “cable”, it is the 3rd most traded currency pair in the world and is responsible for 12% of the daily Forex turnover. It is commonly listed as GBP/USD along with a quoted amount that tells you how much 1 pound is worth in dollars.

A key trait of the cable is that it is highly volatile and changes by an average of 130 points everyday, but goes down to an average of 30 points when only Asian markets are open. It is important to tread carefully around the pound-dollar pair since its changes may be surprising such as moving down even when market conditions are set for it to appreciate.

Additionally, GBP/USD generally moves at the same direction with EUR/USD, but exceptions happen whenever there is news focused on the United Kingdom such as announcements made by their central bank, the Bank of England.

These are some reasons why the pair can make be difficult for novice traders. It is, however, a popular option for investors participating in the swap trade since there is often a substantial difference between the interest rates of the two currencies.