Why GBP/USD is called "Cable"
The nickname "Cable" dates back to the mid-19th century, when the transatlantic telegraph cable laid between London and New York in 1858 transmitted the first real-time exchange rates between the two financial centers. Today, professional traders still use this name on trading floors — a direct legacy of modern finance history.
Volatility and technical character
GBP/USD is one of the most volatile major pairs, with a typical daily range of 80-120 pips versus 60-90 for EUR/USD. This volatility comes from several factors: the British pound is highly sensitive to UK economic announcements (CPI, GDP, retail sales) and Bank of England decisions, and the London Forex market accounts for 43 % of global volume, amplifying movements during European session.
Main drivers
- Fed vs BoE rate differential: when BoE is more hawkish than Fed, GBP/USD rises. Inverse also true.
- Risk-on / risk-off sentiment: pound behaves as a "risk" currency — falls during global stress, rises in risk-on
- Brexit and UK politics: post-Brexit announcements (trade deals, immigration, budget) still trigger 100-200 pip moves
- US economic data: NFP, CPI, FOMC impact GBP/USD as much as EUR/USD since the pivot is the dollar
Trading sessions and liquidity
The best session to trade GBP/USD is the London-New York overlap (8 AM - 11 AM ET): maximum liquidity, tightest spreads (0.5-1 pip on ECN brokers), and strong volatility. Asian session (7 PM - 3 AM ET) is quiet with wider spreads — avoid for scalping.
Specifics to know
GBP/USD has a "momentum-driven" behavior: when a trend establishes, it tends to last. The opposite of EUR/USD which mean-reverts more often. Practical consequence: breakout strategies work better on Cable, range trading better on EUR/USD. On technical indicators, RSI on GBP/USD frequently stays in overbought/oversold zones longer than average.