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 received such recognition because of 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 tool for speculation and generating income from the difference in lending rates in a strategy such as a carry trade.

Pound sterling is the national currency of Great Britain; it is no less widely used in the territory of a number of former colonies that were once part of the great empire. In terms of its value, this monetary unit is today the most expensive in the world; its exchange rate has remained stable for many years.

Despite England's geographical location, the country refused to enter the Eurozone, which saved it from the economic crisis of recent years that befell Europe. True, in recent years the English point has significantly lost its value both in relation to the US dollar and in relation to the Euro.

In terms of participation in financial turnover, the pound is in third place after such currency leaders as the euro and the American dollar, but it is more often used as a safe haven during economic crises and shocks or when making payments on financial markets. It is not for nothing that before the Second World War this currency was the main one throughout the world and occupied the place where the US dollar now occupies.

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

Features of trading the British pound on Forex

Due to its high popularity, this currency has increased liquidity, which makes it possible to use it as a Forex trading tool. The volume of transactions involving the British pound is about 7.5%.

This currency has a low discount rate, currently its rate is 0.50% per annum, therefore it is very often used when playing with 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 goes up against the backdrop of rising prices for the world's major currencies. True, it should be taken into account that its value is also negatively affected by negative news from Europe; it reacts to them not as strongly as the euro zone countries, but still.

the greatest volatility during the European trading session, on average it is about 1,500 points, but sometimes stronger movements are observed.

The main popular pairs in which this currency takes part 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 features of trading with its use depend on the chosen trading instrument.

A distinctive feature of this instrument is the dynamic changes in its price, which opens up great prospects for making money, but at the same time serves as a source of increased risk, so before you start trading in large volumes, you should first get used to the market.

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