Forex Dictionary Terms

British Pound U.S. Dollar (GBP USD)

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Definition – What does British Pound U.S. Dollar (GBP USD) mean?

The British pound U.S. dollar (GBP USD) is a currency pairing whereby the British pound and the U.S. dollar can be traded against each other. The GBP USD can be thought of as the pound versus the dollar – you short the pound and go long the dollar or short the dollar to go long the pound. The GBP USD is one of the three most traded currency pairs and is also one of the oldest. It was initially traded by undersea cable between the U.S. and Great Britain, so the nickname cable is often used for the pair. The GBP USD may also be written as GBP/USD.

ForexTerms explains British Pound U.S. Dollar (GBP USD)

The GBP USD generally shows a strong correlation with the EUR/USD currency pair. Britain’s economy is tied very closely to the European Union, with the important distinction that Britain still controls its own currency through the Bank of England (BOE). This means that the BOE has more flexibility to engage in economic tinkering than the eurozone nations. As the U.S. has the same freedom, the USD GBP will often move more strongly on economic news than the EUR USD.

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