When the pound is traded vs. the US Dollar it is often referred to as Cable. The name derives the Transatlantic Cable connecting the UK with the USA used to transmit currency prices between the London and New York Exchanges.
If the money supply in the UK economy increases, this will result in the supply of money exceeding the demand of money. This will mean that the banks will have more money to lend resulting in lower interest rates as a result will depreciate the value of the British pound in relation to the US dollar.
The most important economic factors include number of unemployed , unemployment rate, average earnings, retail sales, the level of industrial production and GDP growth, and the balance of payments and housing prices.
Hence, a trader will want to sell (Bid) the GBP/USD currency pair. Conversely, due to prudent monetary policies, the UK’s economy is enjoying robust growth as reflected in the increasing growth rate of its Gross Domestic Product (GDP). This will result in the value of the British pound appreciating in relation to the US dollar. Therefore, traders will want to buy (Ask) the GBP/USD currency pair.
Finally, the British Prime Minister often impacts GBP/USD by making imperative remarks regarding Britain's possible membership into the single European currency, This is expected to have a downward impact on the GBR.
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