British Pound Sterling General Info
The three letter currency code for the British Pound Sterling is GBP and the symbol is £. It is the domestic currency in Guernsey, Isle of Man, Jersey, South Georgia And South Sandwich Islands and United Kingdom.
The British pound (ISO: GBP) is one base unit of sterling – that being the name of Britain's currency – and is subdivided into 100 pence.
Contributing to around 13% of all foreign exchange deals, the pound, or sterling, is the world’s fourth most traded currency.
Reputedly, sterling is 1200 years old. It is said that Anglo-Saxon traders used silver pennies in the eighth century called ‘sterlings’, 240 of which would equal one pound in weight.
Due to its membership of the European Union, Britain could have adopted the euro as its currency upon its introduction in 1999, however the British government opted against this because it wanted to retain monetary policy independence and because it perceived euro adoption as offering only small economic benefits.
In recent years, the most significant event to affect sterling’s valuation was the UK’s vote to leave the European Union on June 24th 2016 – a day on which the exchange rate for GBP/USD fell by as much as 11%.
In the past two decades, the pound’s highest valuation against the dollar occurred in November 2007 when GBP/USD reached 2.1161. Its lowest value came in October 2016, three-and-a-half months after the historic ‘Brexit’ vote, when GBP/USD reached 1.1905.
GBP - Market View
By mid-July sterling had fully recovered following the politically complicating outcome of June’s UK general election, which resulted in a hung parliament despite the ruling Conservative party holding a twenty-point lead over the opposition Labour party at the time the election was called.
GBP/USD finally made a clean break above $1.30 in July, supported by comments from Bank of England Governor Mark Carney, who said that the bank’s committee remained open to interest rate hikes.
However, the prospect of hikes by the BoE remains far-fetched to many analysts, including Guy Petcho of Voya Investment Management, who told Reuters in July that the British pound is set to fall by as much as 15% against the dollar by the end of 2017. Petcho believes that UK economic growth will take a turn for the worse in the second half of the year and his prediction marks a fall in GBP/USD to the $1.10s.
Other forecasts for the pound include that made by veteran investment advisor Beat Wittmann of Porta Advisors, who in June expressed his belief that the pound is set for further significant falls this year as a result of an “erosion of consumer and investment confidence” in the UK, caused in large part by political and Brexit-related uncertainties.
In the second half of July, Britain’s currency fell to multi-month lows against the euro (€1.1113) and against the commodities and sentiment-driven Canadian dollar (C$1.6294) and Australian dollar (A$1.6417).
GBP/USD - 00:00 BST
1 Day 1 Week: British Pound Sterling finished the last session of the week up against the United States Dollar with the GBP/USD at 1.2997, a rise of 0.24% and also up for the last 7 days with a rise of 0.63%.
3 Month Trend: GBP/USD is trading higher in the 3-month range [Hi:1.3127, Lo:1.2622] and for the quarter is up 1.46%.