GBP/USD Live Chart

The GBP/USD pair is one of the major pairs in the Forex world. While the liquidity doesn’t match the Euro against the US dollar, it is still considered to be one of the major currency pairs. Part of the reason is that before the end of World War II, the British pound was the world’s reserve currency. This is a status that is now enjoyed by the US dollar, meaning that the US dollar is used in almost all commodity markets now. In other words, if you wish to buy petroleum, you have to do so in the US dollar. The same thing can be said with most other commodities as well, which of course is why the US dollar is so important.

However, the British pound is often used as a proxy for banking, as London is one of the largest banking centers in the world. There is also a little bit of a petroleum aspect to this pair, although that is starting to fade. The British own quite a few oil rigs in the North Sea, but the United States is starting to drill its own petroleum at a fairly large volume now, so this is starting to become less and less of a factor.

GBP/USD Live Chart:



 

The spread in this pair is reasonable, as it is normally less than four pips. Because of this, it is a very liquid pair that a lot of people will trade. There is no specific time frame that is best to trade this market and, as it is liquid enough that it moves during all markets. However, it probably moves the slowest during Asian trading.

What Major News Events Impact the EUR/GBP?

There are various announcements they can move this currency pair, with interest-rate decisions coming out of both the Bank of England and the Federal Reserve of course being the most important. There are other announcements that are typically important as well, including GDP of both countries, employment numbers of both countries, and both CPI and PPI numbers. Because of this, there are a lot of moving parts in this particular Forex pair, but it does tend to trend is very nicely. After all, this is a pair that will follow the movements of London banks, as they invest around the world. Because of this, it makes sense that this pair falls in favor of the US dollar when there is a lot of concern as a lot of money will flow from London into US Treasury Bonds, as they are considered to be the safest investment and a way to guarantee a return of capital as opposed to a return on capital.

With that being said, this pair tends to rise with better economic conditions around the world. This is because money flows out of Treasury Bonds and into banking systems that quite often are based out of London, which of course creates a demand for the British pound as it is the local currency. The British pound is unique in the sense that it has exposure to Europe, but isn’t the Euro. The British main trading partner is the European Union, followed closely by the United States. Quite often you will see money flow into the Pound and out of the Euro when there are problems in the European Union. While this of course will have an effect on the EUR/GBP pair, you can also be seen in this pair at times of extreme volatility.

All things being considered though, this market is a very stable one that has plenty of liquidity and a reasonable spread. It is because of this that quite a few traders will start out using this pair, the EUR/USD pair, and perhaps the USD/JPY pair as the market simply choose to trade. Ultimately though, this pair can move a bit quicker than the EUR/USD pair, but perhaps not as quickly as the USD/JPY pair. Several traders have made their careers out of trading both the EUR/USD pair, and the GBP/USD pair. Most expert advisors for the Metatrader platform will also trade this pair in conjunction with the EUR/USD pair.

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