GBP/USD GBPUSD

The economy of the United States is the world's largest by nominal gross domestic product (GDP), meaning it has the highest market value of goods and services production output. Despite this fact, the British pound’s nominal value is higher than the US dollar.

The explanation for this is that the nominal value of a country's currency is not necessarily related to its economic strength.

Another example of this can be found in EUR/USD, the world’s heaviest traded currency pair, which has a numerator (EUR) that is nominally higher than the denominator (USD), yet this is not related to the strength of US and European economies.

The main factors that move GBP/USD are:

• Interest rates of central banks - US Federal Reserve (Fed) and Bank of England (BoE), the central banks for the US and the UK, make key policy decisions on interest rates and money supply. The banks can affect the value of their currencies through the purchasing and selling of foreign currencies (Forex), as well as by raising or lowering interest rates.
• Geopolitical tensions - uncertainty surrounding the political system in the US or the UK can have a strong influence on the exchange rate of GBP/USD. Brexit, the plan for the United Kingdom to exit the European Union, is an example of a political event that had economic implications for British and global economies.
• Government reports - for example, the Bureau of Statistics of the US Department of Labor releases its Employment Situation Summary reports and the Office for National Statistics reports on the UK's employment and unemployment-related statistics. High employment figures in the US (and a low unemployment rate) might cause the USD to rise.
• Global trade - changes in the exchange of goods and services between the US and the UK, as well as other countries, may influence their currencies’ strength.

To learn about more factors read the "What Events Impact Forex Trading" article.

Follow these steps to trade CFDs on GBP/USD:

1. If you don’t already have a Plus500 account, open a Trading Account Here.
2. Complete your account registration and verification process.
3. Search for GBP/USD under ‘Forex’ > ‘Popular Pairs’ or type ‘GBPUSD’ in the search bar.
   * You can add GBP/USD to your Watchlists, by clicking the Watchlists star in the instrument’s info screen.
4. View GBP/USD's chart for live quotes in real-time, and check the forex pair's future events in the Economic Calendar, which can help you develop your trading strategy.
5. Consider setting stop orders that allow you to lock in profits and limit your losses.
6. Buy or Sell GBP/USD based on the direction you think it will move.