Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
GBP/USD is one of the most popular currency pairs in the forex market as it brings together pound sterling and US dollar. Get more information on GBP/USD – known as ‘cable’ – and find out how you can take advantage of the pair’s price movements with IG.
Minimum size 1
Contract size GBP 100,000
One Pip means 0.0001 USD/GBP
Value of one Pip USD 10 (GBP 7.95)
Margin 3.33%
Minimum stop distance 4
Minimum guaranteed stop distance 2.0%
Your aggregate position in this market will be margined in the following tiers:
| Tier | Position size | Margin |
| 1 | 0 - 50 Contracts - USD | 3.33% |
| 2 | 50 - 250 Contracts - USD | 3.33% |
| 3 | 250 - 400 Contracts - USD | 3.33% |
| 4 | 400 + Contracts - USD | 6% |
If your aggregate position is larger than Tier 1, your margin requirement will not be reduced by non-guaranteed stops.
Please note: we have tried to ensure that the information here is as accurate as possible, but it is intended for guidance only and any errors will not be binding on us.
You can trade cable by opening a CFD trading or spread betting account. The price of GBP/USD represents how many dollars you would need to sell in order to buy one pound. So, if the price quote is 1.22075, it means that £1 costs just over $1.22.
Because CFDs and spread bets are derivative products, you can speculate on the price of cable without taking ownership of the underlying currencies. This enables you to go long (buy) or short (sell). If you think the pound will rise in value against the dollar, you could go long. If you think the pound will fall in value against the dollar, you could go short.
You should keep up to date with any fundamentals that could move the GBP/USD price. This includes news concerning Brexit and the US-China trade war, as well as recurring events such as Bank of England (BoE) and Federal Reserve (Fed) announcements.
The best time to trade GBP/USD is when the British market and the American market are both open – between 2pm and 6pm (UK time). That’s because that’s when GBP/USD is at its most liquid, meaning you are likely to get tighter spreads. However, the market tends to be more volatile outside this heightened liquidity window, which also provides opportunities to profit.
There are many different GBP/USD trading strategies to choose from, depending on your trading style. These forex trading strategies will help you to determine when it’s time to enter and exit a trade and include the momentum indicator forex strategy, RSI indicator forex strategy and breakout trading forex strategy.
Other positions taken by clients trading this market
Use this to see how IG client accounts with positions on this market are trading other markets. Data is calculated to the nearest 1%, and updated automatically every 15 minutes.
This is calculated to the nearest 1%.
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How can I trade Brexit volatility with GBP/USD?
You can trade Brexit volatility with GBP/USD via spread betting and CFD trading. These products enable you to speculate on markets that are rising as well as falling. If you think GBP will strengthen against the USD, you will open a long position and if you think USD will strengthen against GBP, you will open a short position.
Find out everything you need to know about trading Brexit-related volatility
How can I profit from trading GBP/USD?
You can profit from trading GBP/USD if you trade the currency pair via CFDs or spread bets. If you think that GBP is going to increase against USD, you would buy the pair (go long). If you think that the pound will decrease in value against the US dollar, you would sell the pair (go short). Your profit or loss will depend on how accurate your prediction is, meaning it is possible to profit whichever way the market moves.
Why is GBP/USD referred to as ‘cable’?
GBP/USD is referred to as ‘cable’ because deep-sea cables used to carry buy and sell information between the LSE and NYSE. Though this method has been replaced by satellites and fibre optic cables, the name is still popular among forex traders.
Are the British pound and US dollar safe currencies?
Whether or not the British pound and US dollar are safe currencies depends on factors such as current liquidity, volatility and external economic events. Both currencies have traditionally been viewed as ‘safe havens’, but the election of President Trump and complexities around Brexit could shift this perception.
Forex is a volatile market and currency values fluctuate continuously. It’s important to consider all technical and fundamental factors before trading GBP/USD.
What is the history of GBP/USD?
GBP/USD has a long history, with the pair first trading after the US dollar (USD) was introduced in 1792. In the mid-19th century, when it was first referred to as ‘cable’, GBP/USD was the most traded forex pair in the world. It still ranks among the highest today.
Before World War 1 (WW1), the pound (GBP) was the world’s primary reserve currency, but it lost its footing during the war. The UK was heavily indebted to the United States post-WW1, and GBP was devalued by more than 30%. This was when the US dollar took its place as the primary reserve currency.
In 1940, a fixed exchange rate was implemented under the Bretton Woods system, when the pound was trading at $4.03. Every other major currency also became linked to the dollar, while dollar was linked to the gold price. By WW2 (1949), the pound was devalued once again to $2.80.
The Bretton Woods system collapsed in 1971 and GBP became a free-floating currency, but it continued to depreciate against USD, reaching a new low of $1.48 in 1983. More bad news followed in 1992 (Black Wednesday) when the pound dropped by 25%.
The pound suffered yet another setback in 2008 during the global financial crisis. GBP fell to its lowest price against the USD since 2003. It recovered most of its value by 2016 when, following the Brexit referendum, GBP/USD volatility increased to reflect the abrupt market uncertainty. You can find out more about the value of the pound since the Brexit referendum here.
As of 2019, the pound is the fourth-largest reserve currency, with the euro (EUR) in second place and the Japanese yen (JPY) in third.
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1
By number of primary relationships with FX traders (Investment Trends UK Leveraged Trading Report released July 2024).
2 Based on revenue (published financial statements, 2023)
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