GBP-USD or ‘Cable’ is the exchange rate between Britain’s Pound and America’s Dollar. About half a trillion dollars worth of GBP-USD is traded a day and it’s the third biggest currency pair behind EUR-USD and USD-JPY.
|Dealing hours||Sunday 22:05 to Friday 22:00|
|Exchange hours||24 Hours (trading break 22:00-22:05)|
|GTD minimum distance||1.50%|
|Bet type||Daily funded bet|
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1. Spread bettors refer to GBP-USD as ‘cable’, deriving from the transatlantic cable laid between the US and Britain in the mid-nineteenth century. The first reliable cable was completed in 1866 and transmitted GBP-USD rates between New York and London. An exchange rate was published in The Times from August 10th 1886.
2. The GBP’s biggest high against the USD was on November 6th 1980, at $2.466;
3. And the GBP’s lowest rate was in February 1985, at $1.05.
4. More recently, the GBP climbed to over $2.11 on November 7th 2007;
5. And on February 2nd 2008 it reached a low of $1.426.
6. Both currencies have been the global reserve currency. Prior to the 1920s, GBP was dominant with almost 80% of all foreign debt denominated in pound sterling. By the 1920s, USD was hot on GBP’s heels, until it overtook GBP from the 1940s onwards.
7. GBP is the oldest existing currency in the world. In AD 980, one pound could buy 15 heads of cattle. After a thousand years of inflation, it can buy a McDonald’s cheeseburger. We are unsure of the exact cattle content.
8. GBP was pegged to the USD from 1940. In 1971, President Nixon decided to unilaterally abandon the Bretton Woods system and free-floating exchange rates were re-introduced.
9. A one mile high stack of dollar bills would be worth $14.5m.
10. GBP-USD can be particularly volatile to trade due to its lower liquidity relative to other fx majors. Because of this the rate can move significantly immediately after economic or political events. This volatility makes it a popular spread betting pair.
11. The number of USD in circulation has increased massively. In 1960, there was $177.41 circulating for every person in the US, by 1990 the figure was $1,062.86. However, most dollars now exist electronically.
12. In one of the earliest instances of attempting to shore up confidence in a currency, in 1124 Henry I castrated 94 mint workers for producing sub-standard coins.
13. The GBP/USD exchange is one of the longest running and most important in history. Because of this, it is one of the few currency pairs where the USD is quoted as the counter.
14. The largest USD note still printed is $100. However, the $500, $1,000, $5,000 and $10,000 notes are still in circulation. A $100,000 Gold Certificate also exists, but has only ever been used for transactions between Federal Reserve Banks.
15. There is believed to be over $70m worth of counterfeit USD. That is $1 for every $12,500.
Trading GBP-USD with Core Spreads mirrors the fluctuations of cable without needing to purchase real currency. Spread betting the GBP-USD allows you to profit, or incur losses, whichever way the markets move at a razor-thin, fixed 0.9 spread. Placing a spread bet on the GBP-USD is as straightforward as our charges.
For instance, you place a £10 a pip buy trade at a bid-offer spread of 1.45302 – 1.45311 and the markets rise by 10 pips to a bid-offer spread of 1.45402 – 1.45411. At this point you decide to sell, closing your trade at 1.45312 points, giving you a profit of £90 (1.45311 – 1.45402 = 9 pips and 9 pips x £10).
Conversely, the markets fall 10 pips and you decide to close your trade at a bid-offer spread of 1.45202 – 1.45211, incurring a loss of £109 (1.45311 – 1.45202 = 10.9 pips and 10.9 pips x £10).
You can spread bet GBP-USD and thousands of other instruments by signing up for an account here.