Description
The GBP/USD exchange rate reflects the amount of U.S. dollars (USD) required for one British pound (GBP). Movements in the GBP/USD exchange rate are influenced by factors such as the monetary policies of the U.S. Federal Reserve (Fed) and the Bank of England (BoE), global economic trends, U.S.-UK trade relations, and geopolitical events.
A lower GBP/USD exchange rate indicates a stronger British pound, which typically helps reduce import costs but may weaken the competitiveness of British exports. Conversely, a higher GBP/USD rate suggests a weaker pound, benefiting exports but increasing import costs.
The volatility of the pound has been particularly pronounced since the UK's Brexit decision, as uncertainties surrounding trade policies and economic prospects have risen.