Pound Sterling (GBP)
The British Pound (GBP) or Pound Sterling, is the currency of the United Kingdom. It is the oldest currency that’s still in use today and is the fourth most-traded currency in the world, after the US Dollar (USD), the Euro (EUR) and the Japanese Yen (JPY).
Key Info
Currency code: GBP
Currency symbol: £ (Pounds), p (pence)
Nickname: Sterling
Affiliated central bank: Bank of England (BoE)
Key currency pairings: GBP/EUR, GBP/USD, GBP/AUD
Denominations:
Coins: 1p, 2p, 5p, 10p, 20p, 50p, £1, £2
Notes: £5, £10, £20, £50
Where is Pound Sterling Used?
The British Pound is used across the United Kingdom as well as Jersey, Guernsey, and the Isle of Man, as well as many of the British Overseas Territories.
It’s the official currency in Tristan da Cunha, South Georgia and the South Sandwich Islands, and the British Antarctic Territory. It’s universally accepted in Gibraltar and the Falkland Islands. And it’s widely used in Saint Helena, Ascension, and the Pitcairn Islands.
What Affects GBP Exchange Rates?
A variety of things affect GBP exchange rates, and often the factors that impact the Pound are nuanced and require some analysis.
That said, there are three key drivers of movement in Sterling.
Bank of England (BoE)
The Bank of England (BoE) meets every six weeks to set monetary policy for the UK. Most notably, the bank sets interest rates, which determine the cost of borrowing. Generally speaking, when interest rates rise so does the Pound.
Pound Sterling is also affected by what the BoE signals it may do in the future, known as ‘forward guidance’. So, if the bank leaves interest rates unchanged but hints that it might hike in the future, GBP exchange rates will likely strengthen.
Domestic Data Releases
As you can imagine, Pound Sterling tends to strengthen when things are looking good for the UK economy.
The main way that investors gauge the UK’s economic health is through data releases. The most impactful releases are usually the inflation rate, GDP, employment reports, retail sales and the services and manufacturing PMIs. These reports can trigger immediate movement in GBP when they’re published.
Other economic news can also have an impact, such as forecasts or analytical reports from economists.
UK Politics
The Pound is very sensitive to domestic political developments. Investors tend to like certainty, so periods of political instability can weigh on GBP exchange rates.
The Brexit vote, for instance, caused significant movement in the Pound, and continues to do so as the UK navigates its future outside of the EU. Likewise, general elections, political dramas and other newsworthy events can often drive GBP movement.
Latest Pound Sterling News
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Pound Turkish Lira (GBP/TRY) Exchange Rate Rises Ahead of Turkish Election Runoff GBP to TRY Pound Sterling (GBP)
May 26 2023Pound Turkish Lira (GBP/TRY) Exchange Rate Climbs amid Turkish Political Jitters The Pound Turkish Lira (GBP/TRY) exchange rate is strengthening … read more
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Pound Euro Exchange Rate News: GBP/EUR Firms on Further BoE Rate Hike Expectations Euro (EUR) GBP to EUR Pound Sterling (GBP)
Pound Euro (GBP/EUR) Exchange Rate Bolsters amid Elevated BoE Rate Hike Bets (Updated 26/5/23, 16:15) The Pound Euro (GBP/EUR) exchange rate is … read more
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Pound South African Rand (GBP/ZAR) Exchange Rate Rangebound as Markets Digest SARB Decision GBP to ZAR Pound Sterling (GBP)
Pound South African Rand (GBP/ZAR) Exchange Rate Slumps as Markets Reprice ZAR (Updated 16:40 26/05/23) The Pound South African Rand (GBP/ZAR) … read more
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Pound Australian Dollar Exchange Rate News: GBP/AUD Wavers amid Strong UK Retail Sales Australian Dollar (AUD) GBP to AUD Pound Sterling (GBP)
May 25 2023Pound Australian Dollar (GBP/AUD) Exchange Rate Climbs amid Debt Ceiling Deadlock (Updated 26/5/23, 09:00) The Pound Australian Dollar (GBP/AUD) … read more
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Pound Euro (GBP/EUR) Exchange Rate Narrows amid Souring Market Mood Euro (EUR) GBP to EUR Pound Sterling (GBP)
Pound Euro (GBP/EUR) Exchange Rate Narrows amid Souring Market Mood (Article updated 16:55, 25/5/23) The Pound Euro (GBP/EUR) exchange rate is … read more
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Pound US Dollar (GBP/USD) Exchange Rate Rises from Eight-Week Low amid Cautious Optimism GBP to USD Pound Sterling (GBP) US Dollar (USD)
Pound US Dollar (GBP/USD) Exchange Rate Crawls Higher as Market Mood Improves (Updated 09:30, 26/05/23) The Pound US Dollar (GBP/USD) exchange rate … read more
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Pound Wavers as UK Core Inflation Climbs to 31-Year High Australian Dollar (AUD) Daily Update Euro (EUR) Pound Sterling (GBP) US Dollar (USD)
Pound (GBP) Spikes on Shock Core CPI Jump The Pound (GBP) found fleeting gains yesterday, following the latest consumer price index data which … read more
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Pound US Dollar (GBP/USD) Exchange Rate Narrows amid Mixed FOMC Minutes GBP to USD Pound Sterling (GBP) US Dollar (USD)
May 24 2023Pound US Dollar (GBP/USD) Exchange Rate Narrows amid Mixed FOMC Minutes (Article updated 09:10, 25/5/23) The Pound US Dollar (GBP/USD) exchange … read more
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Pound Rebounds on Shock Core CPI Jump, US Dollar Wavers amid Mixed Fed Signals Business News EUR to USD Euro (EUR) GBP to EUR GBP to USD Pound Sterling (GBP) US Dollar (USD)
Pound rebounds on shock core inflation jump Euro dented by softening inflation US Dollar wavers on mixed Fed messaging US Core PCE index … read more
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Pound Australian Dollar Exchange Rate to Strike New One-Year High amid Bearish Trade? Australian Dollar (AUD) GBP to AUD Pound Sterling (GBP)
Pound Australian Dollar Exchange Rate Remains Bid amid Cautious Mood (Updated 09:00, 25/5/23) The Pound Australian Dollar (GBP/AUD) exchange rate … read more