BUZ SOCIAL TRADERS
EUR-GBP The Euro/Pound represents a cross between two biggest economies in Europe – the Euro-zone and the United Kingdom. Given the economic proximity and interdependence between the two, the pair is significantly less volatile than many otherEuro or Pound based crosses. The pair is particularly sensitive to changes in monetary policy between the Bank of England and European Central Bank.
BREAKING DOWN ‘GBP’
The British pound has one of the highest trading volumes in the world, trailing only the U.S. dollar, euro and Japanese yen in daily volume. The British pound accounts for about 13% of the daily trading volume in foreign exchange markets. In addition to the nickname “quid,” the British pound is sometimes referred to by the name sterling.
History of the British Pound
The British pound became the official currency of the United Kingdom when England and Scotland united to form a single country in 1707. However, the British pound was first created as a form of money in the year 760. The British pound is the oldest currency in the world that is still used as legal tender.
In the late 19th and early 20th centuries, many countries enacted measures to tie the value of their currencies to the price of gold. The gold standard allowed a uniform way to determine value between world currencies. Prior to World War I, the United Kingdom used the gold standard to peg the value of the British pound. At the outbreak of World War I, the country abandoned the gold standard, then reinstated it in 1925 but abandoned it again during the Great Depression.
In 1971, the United Kingdom let the British pound float freely against other currencies. This decision allowed market forces rather than artificial pegs to determine the value of the currency. In 1990, the U.K. considered tying the value of the British pound to the deutsche mark but abandoned this idea shortly thereafter.
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