British pound

The pound sterling, or as it is also called the "British pound," is one of the seven most popular currencies in the world. It has received such recognition due to its high reliability and exchange rate stability.

In addition to payments for goods and services, it is also actively used by traders in the Forex market.

The pound is an excellent instrument for speculation and profiting from the difference in lending rates in a strategy such as the carry trade.

The pound sterling is the national currency of the United Kingdom, and it is also widely used in several former colonies that were once part of the great empire. Today, this currency is the most valuable in the world, and its exchange rate has remained stable for many years.

Despite England's geographical location, the country refused to join the Eurozone, which saved it from the economic crisis that has befallen Europe in recent years. However, in recent years, the British pound has significantly depreciated against both the US dollar and the euro.

In terms of financial turnover, the pound ranks third behind leading currencies like the euro and the US dollar, but it is more often used as a safe haven during economic crises and upheavals, or for financial market settlements. It's no coincidence that before World War II, it was the world's leading currency, occupying the position currently occupied by the US dollar.

National banks make extensive use of the British pound, forming gold and foreign exchange reserves; its share in bank assets currently amounts to approximately 5% and is constantly increasing, as many central banks have decided to reduce the share of their reserves in US dollars and euros.

Peculiarities of trading the British pound on Forex

Due to its high popularity, this currency has increased liquidity, making it suitable for use as a forex trading instrument. The British pound accounts for approximately 7.5% of trading volume.

This currency has a low interest rate, currently equal to 0.50% per annum, so it is often used in the carry trade strategy, which allows you to make a profit regardless of changes in the exchange rate.

The trading strategy using the pound is based on a simple principle: the British pound almost always rises when major global currencies appreciate. However, it should be noted that its value is also negatively affected by negative news from Europe; it reacts to these less strongly than the eurozone countries, but it does.

its greatest volatility during the European trading session, with the average being around 1500 pips, but sometimes stronger movements are observed.

The main popular pairs in which this currency participates are –

GBP/CHF – Pound/Swiss franc
GBP/JPY – Pound/Japanese yen
GBP/USD – Pound/US dollar
GBP/CAD – Pound/Canadian dollar
GBP/AUD – Pound/Australian dollar
EUR/GBP – Euro/British pound

In all currency pairs, the pound sterling acts as the base currency, except when it is quoted against the euro; the specifics of trading using it depend on the chosen trading instrument.

A distinctive feature of this instrument is the dynamic nature of its price changes, which opens up great potential for profit, but at the same time serves as a source of increased risk, so before starting to trade large volumes, you should first get used to the market.

You can find out the exchange rate of the pound against other currencies on the page - http://time-forex.com/kotirovki