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GBPJPY

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<p><em>The material provided here has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research we will not seek to take any advantage before providing it to our clients.</em><em><br/></em><em><br/></em><em>Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.</em></p>

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<h2>Why is trading GBPJPY so popular?</h2><p>Pepperstone offers access to the most popular currency pairs, such as EURUSD, GBPUSD, and GBPJPY on all platforms. In addition to these, we offer a variety of exotic pairs with spreads from as low as 2.12*.</p>

<table><tbody><tr><td><ul><li>GBPUSD - better known as Cable - is one of the oldest currency pairs still traded today, given the significance of both countries' global economic prowess ( the pound is the 4th largest reserve currency globally) </li><li>Given the pairs’ popularity, it has extensive liquidity for traders to buy and sell with ease at tight spreads. </li><li>GBPUSD has higher levels of implied volatility, relative to other major G10 FX pairs, thereby allowing traders to make potentially more profits as well as losses. </li><li>Out of the 4 top global reserve currencies, the UK boasts the 2nd highest interest rates behind the US, hence, investors seeking currency diversification can still earn decent yield by holding pounds in the money market. </li><li>An importer or exporter may also want to hedge their foreign exchange payments/revenues that they'll receive in the future by using an instrument, such as CFDs. </li><li><em>For example, if the exporter was receiving a large dollar payment, in a month’s time they would be harmed by a stronger GBPUSD exchange rate.  To avoid this risk, they could buy GBPUSD CFDs in the same exposure as their future export revenues. Therefore, if GBPUSD strengthens, then the profits from the CFD position will net-off with the lower export revenues.</em></li></ul></td></tr></tbody></table>

Why invest in GBPUSD?

<table><tbody><tr><td><h3>The health of the UK and US economies<p>This can be measured by key economic data releases such as GDP, retail sales, Purchasing Managers’ Indices, consumer confidence, inflation, employment number etc. Divergences on these metrics can lead to an increase or decrease in the currency pair.<br></p></h3>
<h3>Fiscal policy</h3>
<p>That is, spending increasing or taxes being raised. This affects the competitiveness of the economies in question. </p>
<h3>Monetary policy</h3>
<p>Monetary policy divergence between the Bank of England (BoE) and the Federal Reserve. The speed and timing at which interest rates are raised or lowered. For instance, there was much speculation as to whether the BoE was going to implement negative rates, which was causing weakness in GBPUSD. The size and speed of central bank asset purchases (Quantitative Easing). This all leads to differentials in interest rates between both countries, which has an important impact on the exchange rate. </p>
<h3>Sentiment based indicators </h3>
<p>Sentiment based indicators, such as: </p>
<ul><li>Correlation to risk assets like equity markets, e.g. GBPUSD is relatively high and if equity markets plunge, GBPUSD follows lower too.</li><li>Options markets in the form of 25 delta risk reversals </li><li>Commitment of traders positioning data (net speculators positioning in particular). If net speculators are extremely skewed long or short, then this could indicate a tipping point for a price direction change. </li></ul>
<h3>COVID vaccine rollout</h3>
<p>More recently, the success of a country’s vaccine rollout. Currently, the UK is doing very well which has helped the GBPUSD move higher. </p>
<h3>Share trading </h3>
<p>Appetite for US and UK shares, if one region sees large demand relative to the other that would affect the exchange rate. </p>
<h3>Technical reasons </h3>
<p>If momentum indicators are showing an overbought or oversold reading, or price is at support or resistance levels. </p>
<h3>Major political events</h3>
<p>Brexit was a major driver of GBPUSD as the news regarding the new trading relationship ebbed and flowed. Relations between the EU and UK will continue to change dynamically with potential spats being priced into GBPUSD. Scottish Independence risks are another factor to watch with a Scottish General Election coming up in May 2021.</p></td></tr></tbody></table>

What factors move GBPUSD?

<table><tbody><tr><td><ul><li>Speculators/traders who seek to profit from short term price moves</li><li>Investors who have a long-term view on the currency pair</li><li>Commercial hedgers - importers and exporters</li><li>Central banks intervening in the FX markets or adding to their FX reserves</li><li>Pension funds during monthly and quarterly rebalancing</li></ul></td></tr></tbody></table>

Who trades GBPUSD?

<h2>5 reasons to trade the GBPUSD with Pepperstone&nbsp;</h2>
<script src="https://fast.wistia.com/embed/medias/r944zte9a9.jsonp" async></script><script src="https://fast.wistia.com/assets/external/E-v1.js" async></script><div class="wistia_responsive_padding" style="padding:56.25% 0 0 0;position:relative;"><div class="wistia_responsive_wrapper" style="height:100%;left:0;position:absolute;top:0;width:100%;"><div class="wistia_embed wistia_async_r944zte9a9 videoFoam=true" style="height:100%;position:relative;width:100%"><div class="wistia_swatch" style="height:100%;left:0;opacity:0;overflow:hidden;position:absolute;top:0;transition:opacity 200ms;width:100%;"><img src="https://fast.wistia.com/embed/medias/r944zte9a9/swatch" style="filter:blur(5px);height:100%;object-fit:contain;width:100%;" alt="" aria-hidden="true" onload="this.parentNode.style.opacity=1;" /></div></div></div></div>

<table><tbody><tr><td><strong>Currency</strong></td><td>GBP</td></tr><tr><td><strong>Base margin</strong></td><td>3.33%<sup>✝</sup></td></tr><tr><td><strong>Contract size</strong></td><td>100,000</td></tr><tr><td><strong>Swap type</strong></td><td>Points</td></tr><tr><td><strong>3-day swap</strong></td><td>Wednesday</td></tr><tr><td><strong>Minimum average spread (pips)</strong></td><td>0.38*</td></tr><tr><td><strong>Trading hours</strong></td><td>Instrument available from 00:01 - 23:59. Market opens at 01:00 on Mondays, closes at 23:55 on Fridays.</td></tr></tbody></table>
<p><sub>*Average spreads calculated April 2021.</sub></p>

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<p>GBPUSD is also known as "cable". It's the British pound (GBP) traded against the US dollar (USD) and is one of the most popular currency pairs traded on the foreign exchange (forex) market.&nbsp;It's referred to as&nbsp;"cable", because of the many transactions that took place between London and New York through transatlantic&nbsp;cables.&nbsp;<br></p>

What is GBPUSD?

<p>The instrument is&nbsp;available from 00:01 - 23:59, Monday-Friday. The market opens at 01:00 on Monday and&nbsp;closes at 23:55 on Fridays.</p>

When does GBPUSD open and close?

<p>There are many factors that impact the exchange rate of GBPUSD such as:&nbsp;</p><ul><li>Inflation rates&nbsp;</li><li>Interest rates&nbsp;</li><li>Country deficits or debts&nbsp;</li><li>Economic growth&nbsp;</li><li>Unemployment rate and payrolls (news events and data releases)&nbsp;</li></ul>

What moves the price of GBPUSD?

<p>If you're new to the markets, you&nbsp;can start trading on a <a href="https://secure.pepperstone.com/register?legalEntity=demo&locale=en">demo account</a> that's pre-loaded with $25,000 virtual currency. If you're an experienced trader, you can open a <a href="https://secure.pepperstone.com/register?legalEntity=individual&locale=en">live account</a>&nbsp;in a few simple steps. Here's a few tips on how to <a href="https://pepperstone.com/en-au/trading/get-started/">get started</a> with Pepperstone.&nbsp;</p>

How can I start trading GBPUSD with Pepperstone?

<p>Access all of our <a href="https://pepperstone.com/en-au/market-analysis/">market news and analysis</a>, which is updated on regular basis by our global research team. You can also subscribe to receive&nbsp;our <a href="https://pepperstone.com/en-au/market-analysis/daily-fix/">Daily Fix</a>, written by our Head of Research Chris Weston.&nbsp;</p>

Where can I find GBPUSD news?

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GBPJPY

Why is trading GBPJPY so popular?

5 reasons to trade the GBPUSD with Pepperstone

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