Trading the GBP

The British pound competes with the U.S. dollar (USD), euro (EUR), and Japanese yen (JPY) in daily volume trading. The most common currency pairs involving the British pound are the euro (EUR/GBP) and the U.S. dollar (GBP/USD). GBP/USD is referred to as cable by foreign exchange traders.1

The penny sterling or pence is 1/100th of a pound. Many stocks are traded in pence rather than in pounds. Stock exchanges may use GBX to indicate pence. Though the official name of GBP is pound sterling, “sterling” or STG may be used more commonly in accounting or foreign exchange (forex) settings.

Currencies pegged to the British pound include the Falkland Islands pound, Gibraltar pound, Saint Helena pound, Jersey pound (JEP), Guernsey pound (GGP), Manx pound, Scotland notes, and Northern Ireland notes.

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