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).
Currency code: GBP
Currency symbol: £ (Pounds), p (pence)
Affiliated central bank: Bank of England (BoE)
Key currency pairings: GBP/EUR, GBP/USD, GBP/AUD
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.
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
Pound Euro (GBP/EUR) Exchange Rate Fluctuates as Germany Fell into Q1 Recession Euro (EUR) GBP to EUR Pound Sterling (GBP)
Pound Euro (GBP/EUR) Wavers on Downbeat Germany GDP Growth (Updated 25/5/23, 08:30) The Pound Euro (GBP/EUR) exchange rate is wavering this … read more
Pound New Zealand Dollar (GBP/NZD) Exchange Rate Refreshes Three-Week High amid RBNZ Decision and Risk Aversion GBP to NZD Pound Sterling (GBP)
Pound New Zealand Dollar (GBP/NZD) Exchange Rate Hits Fresh Three-Week High as Anxiety Grips Markets (Updated 08:45, 25/05/23) The Pound New Zealand … read more
GBP/USD Strikes One-Month Low amid UK Private Sector Slowdown Australian Dollar (AUD) Daily Update Pound Sterling (GBP) US Dollar (USD)
Pound (GBP) Limited by Mixed PMI Data The Pound (GBP) saw limited trade against most peers yesterday, as lacklustre private indexes sapped … read more
Pound US Dollar (GBP/USD) Exchange Rate Rebounds off One-Month Low amid Debt Ceiling Crisis Concerns GBP to USD Pound Sterling (GBP) US Dollar (USD)
Pound US Dollar (GBP/USD) Exchange Rate Recovers as Debt Ceiling Fears Hit USD (Updated 16:15, 23/05/23) The Pound US Dollar (GBP/USD) exchange rate … read more
Pound Australian Dollar (GBP/AUD) Exchange Rate Climbs on US Debt Ceiling Pessimism Australian Dollar (AUD) GBP to AUD Pound Sterling (GBP)
Pound Australian Dollar (GBP/AUD) Firms on Crashing Market Sentiment (Updated 23/5/23, 16:50) The Pound Australian Dollar (GBP/AUD) exchange rate … read more
Pound South African Rand Weekly Forecast: GBP/ZAR Climbs as Load Shedding Fears Increase GBP to ZAR Pound Sterling (GBP) Weekly Forecast
The Pound South African Rand (GBP/ZAR) exchange rate climbed last week, as fears over worsening load shedding struck ZAR What’s Been Happening: … read more
Pound Euro (GBP/EUR) Exchange Rate Rebounds Above €1.15 Euro (EUR) GBP to EUR Pound Sterling (GBP)
GBP/EUR Exchange Rate Firms on Upgraded UK Growth Forecast (Updated 15:30 23/5/2022) The Pound Euro (GBP/EUR) exchange rate is trading with modest … read more
Pound Canadian Dollar Exchange Rate Forecast: GBP/CAD Wavers on BoE Uncertainty GBP to CAD Pound Sterling (GBP) Weekly Forecast
The Pound Canadian Dollar (GBP/CAD) exchange rate traded erratically through the week as the Bank of England (BoE) gave mixed signals over monetary … read more
Pound New Zealand Dollar (GBP/NZD) Exchange Rate Weekly Forecast: RBNZ and UK Inflation to Trigger Volatility? GBP to NZD Pound Sterling (GBP) Weekly Forecast
The Pound New Zealand Dollar (GBP/NZD) exchange rate fell last week as disappointing UK jobs data and Reserve Bank of New Zealand (RBNZ) interest … read more
US Debt Ceiling Crisis Weighs on Currencies Australian Dollar (AUD) Daily Update Euro (EUR) Pound Sterling (GBP) US Dollar (USD)
Pound (GBP) Muted amid Lack of Data The Pound (GBP) lacked direction yesterday, as a lack of economic releases left Sterling vulnerable to market … read more