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What Moves British Pound Currency Futures?

gbpusd price study

The British Pound currency futures is one of the most traded currency contracts in the world of currency futures trading.

It is officially called the Pound Sterling, but in most instances is referred to as just the Pound. 1 pound is divided into 100 pence.

British Pound Currency Futures

The Pound is the oldest active currency in the world today, and is one of the few European currencies that have not been pushed out by the EU. This is because a huge percentage of the British population is leery of the EU hurting the economy. Of course, this could change at any given time. But for right now, the Pound is still alive and thriving. 

It is known as one of the highest valued currencies around the globe and consistently valued higher than the American dollar. Only 3 other currencies on the futures exchanges see more action: the American dollar, the Euro and the Japanese Yen.

gbpusd point and figure chart

Factors Influencing Pound Exchange Rate

The Pound is known as one of the least predictable currencies out there, and is famous for its wild fluctuations. Having said that, its exchange rate is affected by the same variables that affect other major currencies around the world. The main factors are the economic condition of the country, the inflation rate, as well as employment rates.

These variables determine whether the Pound rises or falls, so understanding them and being able to forecast them is imperative for successful British Pound currency futures trading.

Government Intervention In  British Pound Currency Futures

In 1997 the Labor Government gave control of the nationwide interest rates to the Bank of England (BOE). The BOE has retained control until this day. The target for the county is to not let inflation get any higher or lower than 2%.

If it ever gets 1% greater or less than the target 2%, the governor of the Bank has to give an open letter to the government detailing why this occurred, and what actions they will take to get back to 2%. However, this has only happened 1 time in history.

Daily British Pound Prices (CME)

Trading Hours For British Pound Currency Futures

Currencies are trading 24 hours a day from Sunday night to Friday night, all around the world. This goes for the Pound currency futures as well. Therefore, for people working during the day, this is a convenient way to invest.

How To Make Money From Trading British Pound Currency Futures

If you want to profit from the Pound in futures trading, you have to understand how to forecast the economy, and make a prediction of the future exchange rate. If you know how to read the countries economic state, and what the future holds for it, you will be able to accurately forecast the future exchange rate at the time the contract comes due.

Having a long term outlook is very important for British Pound currency futures trading.  This is because in the long run, the currency exchange rate reflects how good the economy is doing. However, in the short term it can fluctuate based on any number of variables.

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