GBP to USD: What Moves the Pound-Dollar Rate
Traders nickname the GBP/USD rate “cable,” after the transatlantic telegraph cable that once carried the quote between London and New York. It remains one of the most-watched pairs in the world.
A tale of two central banks
Like most major pairs, cable is largely a contest of interest rates — here between the Bank of England and the US Federal Reserve. When the Bank of England is more likely to raise rates than the Fed, the pound tends to strengthen against the dollar; when the Fed is tighter, the dollar wins.
UK-specific drivers
British inflation data, growth figures and politics all move the pound. Big political events can cause sharp swings, since they change expectations for interest rates and the UK economy.
The dollar side
Cable also moves for reasons that have nothing to do with Britain. Because the dollar is a global safe haven, a worldwide scare can lift the dollar and drag GBP/USD down even when UK news is quiet.
Get the live rate
Check the current mid-market pound-dollar rate on our GBP to USD page, and remember banks add a margin on top of the quoted rate.