The British Pound or the Pound Sterling is the official currency of the UK as well as a few other regions and is denoted by the symbol GBP in the forex market. The GBP is the oldest currency still in use in the world and is among the four majors in the forex market, enjoying high trading volume. The most popular GBP-related currency pairs that forex traders like to focus on include GBP/USD (also known as the Cable), EUR/GBP and GBP/JPY (sometimes referred to as the Beast due to its high volatility). As a result, trading GBP pairs offers forex traders several opportunities to place promising trades and earn pips.

The exchange rate of the Pound Sterling related currency pairs experiences ample movement on the release of important economic data from the UK, such as GDP, inflation, unemployment rate, retail sales, trade balance, industrial production, consumer confidence, business sentiment as well as PMI readings from the manufacturing and services sectors. GBP-related forex pairs also see significant changes to their conversion rate on the announcement of any changes made to the monetary policy or interest rates by the Bank of England (BOE). For instance, if the BOE hikes interest rates or tightens its monetary policy, the GBP gains strength against its peers, which drives price action in the forex market.

In addition, political developments within the UK such as elections also play a significant role in influencing the GBP currency pairs’ exchange rates. In recent years, one of the biggest drivers of volatility in the currency rate of Pound Sterling forex pairs has been Brexit. Positive developments related to Brexit have helped boost the value of the currency while possible talk of a no-deal Brexit drives investors away from the currency and turns the Sterling weaker against its peers, as a result.