The GBP-USD FX pair is one of the most popular and longest running exchanges in fx trading history. We study its daily fluctuations meticulously, but what are some of its lesser known historical facts?
- Traders call the GBP-USD pair ‘cable’, referring to the submarine telegraph cable placed between the United States and Great Britain in the 1800s. In 1866, signals were first sent to and from London and New York carrying the latest pound sterling to dollar exchange rates. In 1886, London-based newspaper The Times began publishing daily exchange rates.
- At different times in history, the two currencies have been the de facto reserve currency. Before the outbreak of the first world war, pound sterling dominated global finance and over 70% of world government debt was denominated in GBP. From the 1920s, the United States Dollar had caught up with the pound, overtaking sterling in the 1940s as the British economy went into relative decline.
- On 6th November, 1980 the GBP climbed to its highest level against the USD, reaching $2.466;
- And in early 1985, pound sterling reached its lowest rate at just $1.05.
- In the run-up to the financial crisis, the pound smashed the $2 mark and hit $2.11 on 7th November 2007;
- Before crashing back to $1.426 on 2nd February 2008.
- The price of the pound was fixed to that of the United States Dollar from 1940 – 1971. President Nixon pulled the United States out of the Bretton Woods system in 1971 and free-floating forex exchange returned to the markets.
- Pound sterling is the oldest currency still in use today. The currency originated in Anglo-Saxon England with one pound weight of silver being equivalent to 240 silver pennies.
- $14.5m worth of one dollar bills stack to a height of one mile.
- The high volatility of GBP-USD makes it one of the most popular pairs amongst FX traders. This is due to its lower liquidity compared to other majors and as such the pair can experience larger fluctuations following political and economic events.
- In the post-war, the global money supply has increased dramatically. In 1960, there were $177.41 for every person in the United States, in 1990 there were $1,062.86. Far more dollars are now electronic.
- Attempting to instil confidence in the pound sterling, King Henry I castrated 94 coin makers in 1124 for producing low quality currency.
- It is estimated that $1 in every $12,500 is counterfeit. That is over $70m worth of fake currency.
- There are $10,000, $5,000, $1,000 and $500 bills still in circulation, whilst the largest bill still printed is the $100. There is also a $100,000 Gold Certificate used for Federal Reserve Bank transactions.
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