GBP USD: Live Pound-Dollar Exchange Rate, Chart and Forecast
The GBPUSD pair is among the most popular currency pairs and falls in the top five pairs by trading volume. It has attracted the interest of many traders and other market participants for speculative and transactional reasons, which indicates a stable level of demand.
The price action of the GBPUSD rate makes the pair suitable for different trading strategies based on technical analysis or analysis of qualitative factors. At the same time, there is a sufficient degree of volatility with acceptable profit potential and acceptable risk level.
What is GBPUSD? Overview
The GBPUSD forex pair is referred to as "the Cable". The origin of the nickname dates back to the mid-19th century, when cable was laid across the Atlantic Ocean to allow for swift communication between London and New York. Traders may state that they are “trading the cable”, meaning they buy or sell the GBP to USD pair. It is one of the oldest and the most traded currency pairs globally, and it falls within the “major” group of forex pairs. It is composed of currencies coming from some of the largest economies globally. Accordingly, the market for GBP to USD pair is highly liquid, and this pair is among the top five pairs by trading volume.
The British pound represents the base currency in this currency pair, while the US dollar is the quote currency. The GBPUSD converter tells how many US dollars will be used to purchase one pound sterling or the quantity of US dollars received after selling one GBP. It should be noted that the USD GBP is a different currency pair, and the exchange rate indicates the quantity of pound sterling required for the purchase of one US dollar.
The pound to USD rate has been categorised as one of the less volatile currency pairs in the foreign exchange market. But the rise in uncertainties and risk originating from changes in political and economic factors affected the volatility levels of the GBP USD pair in recent years.
Traders can follow live updates in the exchange rate through the GBPUSD live charts available for different time frames. The ZFX portal gives an insight into the UK pound to USD fluctuations on a time frame as low as one minute up to one month. This enables traders to detect and confirm potential trading signals across different charts using different charting tools.
How to Read the GBPUSD Chart
The manner in which forex pairs are quoted indicates the value of a base currency against the quote currency. Hence, to convert GBP to USD, you will need to know the prevailing exchange rate to find out how many US dollars are needed for one pound or the quantity of US dollars received after the sale of one GBP. A distinction should be made between the GBPUSD and the USD to GBP rate. The GBP is the base currency in the first pair, and USD is the base currency in the second pair.
Changes in forex rates are measured in pips (fourth decimal), and pipettes (fifth decimal) are a fraction of a pip. The value of one pip depends on the position's size and the GBPUSD fx rate.
The rates shown in the example are called the bid and ask rates, but traders should consider the prices from their perspective. Consequently, these represent the sell and buy prices at which traders will exchange the pair. To easily understand the rates, traders will always buy the pair at the higher rate and sell it at the lower rate. Thus, you will buy the GBP to USD at a rate of 1.33528 USD per pound, while you can sell the pair at 1.33375 US dollars for one pound.
GBPUSD Historical Data
The GBPUSD exchange rate history dates back to 1971, when the rate was free-floated. Since then, the pair experienced trendy movements, price swings, reversals, and today it shows a certain level of choppiness.
GBPUSD Exchange Rate History
It is evident from the pound sterling to USD history that the forex rate has experienced sizable bearish and bullish movements with numerous price swings and sideways movements. Until 1971 the British pound to USD rate was fixed, and the exchange rate was determined by the British Government. The pair hit an All-Time-High rate in March 1972 when the GBP to USD exchange rate fluctuated up to 2.644 USD and closed at 2.6163 per pound sterling. The pair dipped to an All-Time-Low rate of 1.0790 USD in February 1985 due to a stronger US dollar coming from an increase in oil prices, inflation and rise in interest rates. In March 2020, the pair reached a multi decade low price when 1 GBP to USD rate was 1.1414.
GBPUSD historical fluctuations indicated that the pair might move in defined trends, but during the last couple of decades, the trends' length has decreased. Also, the GBP to USD rate shows occasional range-bound movements in wider intervals. In recent history, the pair registered an upward trend from July 2001 to October 2007, appreciating by more than 40%. Nevertheless, two major price reversals interrupted the trend offering plenty of trading opportunities.
A sharp and uninterrupted downtrend was evident from July 2008 to February 2009, when the pair lost more than 25% of its value. After the depreciation, the GBP to USD exchange rate registered multiple price swings until mid-2015, when it experienced a new decline, after which it continued to move sideways.
GBPUSD Exchange Rate Today
Today the pound vs dollar rate moves in a broad range, with multiple price swings forming a mild downward trend. However, based on historical movements, a swift reversal may occur if favourable changes appear in relevant factors. The pair experiences an average hourly volatility of around 15 pips, while its average daily volatility is estimated to be slightly above 80 pips.
What Influences GBPUSD Exchange Rate?
Although countless factors could affect the GBP to USD exchange rate, some of the factors that might have the largest impact are:
- Actions taken by the Bank of England and the FED regarding their respective monetary policies.
- Changes in interest rates are among the key drivers that can cause movement in the GBPUSD rate.
- Each country's economic performance. Economic growth or lack of it could strengthen or weaken the domestic currency.
- Deviations and changes in key economic indicators should be considered when trading the GBP/USD pairs.
- Differences in inflation rates between the two economies are crucial because a lower inflation rate is generally associated with an increase in currency value.
- Differences between the yield generated from Government issued bonds between the two countries will affect the forex rate of the national currency.
- The rate is also influenced by changes in the interest rates on Euro sterling and Eurodollar deposits because they are potential indicators of the interest rate differentials.
GBPUSD Forecast and Predictions
Market participants try to anticipate the future movements in GBPUSD rate through technical analysis tools, fundamental analysis of underlying factors or a combination of both. However, there is a higher level of uncertainty related to the long-term GBPUSD forecast because a vast number of unexpected political or economic events could occur.
Nevertheless, it could be said that significant political risk from the GBP side is not expected for the upcoming period since the next national elections in the UK are planned for 2024. But traders should pay attention to the potential effects of the senate elections in the US. Find the potential forecasts about the movement in the GBP USD exchange rate in the following table.
|Forecasted GBP to USD rate|
Notice that forecasts indicate potential bullish movement, yet it should be stated that there are short term bearish expectations. The accuracy of these forecasts is tightly related to the economic activities in the post-COVID-19 economy and the uncertainties and risks of possible new lockdowns.
In addition, some experts state that there could be potential inflationary pressure and potential changes in interest rates that could positively or negatively impact the GBP USD exchange rate. Apart from certain disagreements about the direction in which the rate will move, there is consensus that this pair will continue with its price swings and choppy fluctuations.
Why Trade GBPUSD Today?
Even though there are many reasons behind the popularity of this pair in the forex market, primarily traders like to trade GBP to USD because:
- GBP to USD is one of the most liquid forex pairs, ensuring a sufficient level of demand and supply in the forex market. Hence, traders can easily and swiftly enter or exit a trade with this pair.
- An acceptable level of volatility creates profit-making opportunities without the excessive risk associated with the exotic currency pairs.
- In general, brokers set a lower spread for the GBPUSD exchange rate, and this reduces the transaction costs.
- Given the popularity of the individual currencies and their popularity as a forex pair, plenty of data, information, and news are readily available that could be incorporated into your analysis.
- GBPUSD is available for trading with CFDs, which is a popular instrument among traders.
Where Can I Invest in the GBPUSD Pair?
To benefit from movements in the exchange rate pound to dollar, traders may consider trading the Contracts-for-Differences derivative instrument offered by ZFX. The features and properties of this instrument combined with the favourable trading conditions offered by ZFX make the instrument somewhat superior to other available instruments. By trading CFDs through the ZFX platform, traders could receive generous trading leverage. They can use to increase the profits from a successful trading position. Moreover, ZFX does not charge deposit or withdrawal fees, and there is a zero-trading commission.
Key economic releases and events are crucial when it comes to analysing the GBP to USD. Hence, traders may find relevant information in the economic calendar, market news and market outlook sections provided by ZFX. Furthermore, ZFX offers its clients the opportunity to benefit from speculating with prices of other assets such as stocks, indices and commodities.
How to Trade GBP/USD Now
The trading process to speculate on price movements with CFDs is fairly easy, and explained below.
1. Open a ZFX Account
The ZFX primary website is the first place where traders will land to register their accounts. They can go directly to the "Open an account" option, or they might want to consider the different types of accounts before registering.
As you can see, traders can select between a live trading account and a demo account to practice their trading skills. Selecting the desired option will take you to the next window.
Provide the requested information and continue by pressing the “Next” button.
2. Verify your Account
To complete the account opening process, you need to you verify your account. ZFX will ask traders to provide a national ID, passport or driver’s license. This helps to verify their account and make sure that the relevant document is valid. Also, traders need to verify their bank accounts by uploading a copy of their bank statement or bank book.
3. Make your First Deposit
ZFX has set two of the most popular methods for transferring funds to a trading account. Traders can decide to fund their accounts through Bank Transfers or Credit Cards. Navigate to the “myZFX” options in the upper right corner to enter your account. On your dashboard, look for the "Deposit" option and follow the instructions based on your funding method.
4. Start trading GBPUSD
The final step is to download the ZFX MT4 trading platform. There, enter your trading account to buy or sell GBPUSD. To log into your account, open the trading platform and in the lower left part, look for the accounts folder. After entering your credentials, you need to select Live server or Demo server.
In the upper left section, select the asset they plan to trade. Then, enter the position's elements in the graph and order window that emerges on the screen. Before you buy or sell the GBP to USD, you need to specify the volume and type of order. Setting up a take profit and stop-loss orders are optional.
Tips for GBPUSD Beginner Traders
The properties of the GBPUSD rate makes the pair a highly sought instrument in the forex market. Consequently, some hints to follow are:
- Always follow the releases and announcements from relevant monetary and fiscal authorities from the UK and the US.
- Utilise the opportunity to test and fine-tune your trading strategy with the demo account offered on the ZFX MT4 platform.
- Always look at the GBP USD news to identify potential trading opportunities.
- Identify the support and resistance levels because the GBPUSD pair experiences price swings. Traders may also want to detect breakout trading signals.
- The best time to trade any forex pair is usually during the intersection in the trading hours of the forex exchanges. Indeed, this is when the liquidity and the volume are peaking.
- Consider the GBPUSD correlation with other currency pairs.
- Understand the structure of both economies and anticipate potential changes in the forex market created by changes in economic data releases.
- Don’t forget that the dollar vs pound exchange rate is not the same as the GBPUSD rate.
Bottom Line: Is GBP USD a Good Investment Now?
A combination of the level of demand, liquidity and trading volume with the way in which the GBPUSD exchange rate moves might offer numerous trading opportunities. Moreover, traders could use technical and fundamental analysis to detect trading signals and anticipate movements in the forex rate. Also, the strength of the national economies and their role in global economic activities means that a vast number of factors from different areas affect the GBPUSD rate.
The degree of volatility is another property that is attractive for market participants and traders. This is in a sense that GBP to USD offers the benefits brought by the major forex pairs but with higher profit.