Understanding GBPUSD

Today we will be taking a closer look at understanding GBPUSD.

GBP
-no global business
-risk currency
-more linked to the UK economy, politics, central banking

USD
-global business currency
-safe haven globally
-Petrodollar

UNDERSTANDING THE CURRENCY PAIR

-we have to understand that within this pair “GBPUSD” one is a “risk” currency (GBP). (USD) is a “safe haven currency” and is also known as the world reserve currency. During times of economic uncertainty our doubt, or during any periods of times where we have more $ strength, which can be induced by the FED central banking, interest rate hikes and so forth, we will always have the $ dominate, even if the other currency can have some short term strength.

THE USD IS THE WORLD RESERVE CURRENCY
What does this mean?

-this means that the majority of INTERNATIONAL business is denominated in USD. We can see this very relevant when we are looking at the OIL industry and how oil is always exchanged in USD. Hence the name “PETRODOLLAR”.