Why GBP is becoming the strongest currency
CORRECTION: From 2:26 to 3:43 in the above video, the chart displayed is mistitled as "GBP/EUR" and in fact shows the historical pricing for EUR/GBP
Look no further than GBP/USD to see why the British pound has been one of the strongest major currencies of the year - now trading above 1.2820. This surge puts the pound 2,000 pips higher on the dollar than 2022 lows.
Inflation in the UK
A key driver behind the pound's strength this year could be the continued rise in UK inflation data. This trend has direct impact on the currency since central banks look to inflation for guidance on interest rate decisions. The UK leads major economies in core inflation at 7.1% - over one percent more than the US and EU, at 5.3% and 5.4%, respectively*.
An even more distinct trend, the UK's inflation is the only one of those three that has continued rising this year. As a result, traders are anticipating even more interest rate hikes in the future, furthering the currency's rise.
GBP/JPY price action
GBP is at historic highs versus the Japanese yen, whose interest rates remain negative. In the past month, GBP/JPY has broken through 182.00 for the first time since 2015. This extreme builds on a rally throughout 2023, with the pair starting the year trading around 158.00.
GBP/JPY historical prices
How to trade GBP/JPY
- Open an account to get started, or practice on a demo account
- Choose your forex trading platform
- Open, monitor, and close positions on GBP/JPY
Trading forex requires an account with a forex provider like tastyfx. GBP/JPY can be found in tastyfx's platform under the 'Minor' pairs tab. Many traders also watch major forex pairs like GBP/USD and AUD/USD for potential opportunities based on economic events such as inflation releases or interest rate decisions. Economic events can produce more volatility for forex pairs, which can mean greater potential profits and losses as risks can increase at these times.
You can help develop your forex trading strategies using resources like tastyfx’s YouTube channel. Once your strategy is developed, you can follow the above steps to opening an account and getting started trading forex.
Your profit or loss is calculated according to your full position size. Leverage will magnify both your profits and losses. It’s important to manage your risks carefully as losses can exceed your deposit. Ensure you understand the risks and benefits associated with trading leveraged products before you start trading with them. Trade using money you’re comfortable losing.
This information has been prepared by tastyfx, a trading name of tastyfx LLC. This material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. You should not treat any opinion expressed in this material as a specific inducement to make any investment or follow any strategy, but only as an expression of opinion. This material does not consider your investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. No representation or warranty is given as to the accuracy or completeness of the above information. tastyfx accepts no responsibility for any use that may be made of these comments and for any consequences that result. See our Summary Conflicts Policy, available on our website.
