GBP/USD

GBP/USD moves on the gap between UK and US interest rates and on the growth and inflation news behind each central bank's next decision. Sterling is the base currency and the dollar the quote currency, so a rise in the pair means a stronger pound or a weaker dollar. On most days the dollar side dominates and GBP/USD moves with EUR/USD; across 2025 the two pairs' daily changes had a correlation of +0.82.

The days that set GBP/USD apart are UK-specific. A Bank of England surprise, a UK inflation print, a fiscal statement or a political shock moves sterling against every currency at once, and those are the days when GBP/USD and EUR/USD part company. Two of the three historical episodes on this page began with UK events, the 2016 referendum and the September 2022 fiscal statement.

London is the centre of the market for the pair. The United Kingdom hosts about 38% of global FX trading, more than any other country and about twice the United States' 19% (BIS Triennial Central Bank Survey 2025, preliminary results by trading location). Both of the pair's home markets are open together only in the London–New York overlap; the Asian session falls outside both.

Five scheduled releases and a wider class of UK fiscal and political events are the main recurring drivers of GBP/USD. Budgets, fiscal statements, elections and referendums usually have known dates; their outcomes are what cannot be known in advance. Each driver works through the UK–US rate gap or through sterling's own risk. The move on each release depends on the surprise against expectations, so the cards below give no typical pip range; the measured spread of ordinary daily moves is in the volatility section.

The rate gap is currently small. With Bank Rate at 3.75% (Bank of England) and the upper limit of the US federal funds target range at 4.00% (Federal Reserve), the top of the Fed's range sits 0.25 percentage points above Bank Rate. Before any markup, that gap and the two currencies' day counts set the sign of the overnight swap; with a gap this narrow, the broker's markup decides more of the figure than the rates do, and can make both sides pay, as the calculation section shows.

US releases reach GBP/USD through the dollar. CPI and Non-Farm Payrolls are both published at 8:30 a.m. New York time (13:30 UTC on US standard time, 12:30 UTC while US daylight saving time applies), inside the London–New York overlap, and FOMC statements at 2:00 p.m. New York time, after the London close. A UK release moves the pair through sterling instead, and moves EUR/GBP at the same time, which is how to tell the two apart on a chart.

GBP/USD moves more pips a day than EUR/USD, but in percentage terms the two pairs were level across 2025. Measured on the ECB's daily reference fixings, the median day-to-day change in GBP/USD was 34.4 pips against 28.0 for EUR/USD, worth $344.00 and $280.00 per standard lot at $10 a pip. As a share of the price, the medians were 0.255% and 0.250%: the extra pips come mostly from sterling's higher price, about 1.2 times the euro's against the dollar across 2025.

A single year can mislead. Over the ten years to 2025, GBP/USD's annualised volatility was higher than EUR/USD's in eight, by 10% to 64%, and level in the last two. The two widest gaps came in 2019, at 64%, and 2016, the year of the referendum, at 54%.

For a stop or a position size, read the average true range on your own chart: the fixing figures show the relative scale of the two pairs, not the distance a stop needs. Those figures count moves in either direction, and a stop-loss sits on one side of a position. In 2025 the fixing fell by more than the 34-pip median on 56 days and rose by more on 71, about five or six times a month each way, and intraday ranges cross a stop of that size more often; it fell by more than 102 pips, the 90th percentile, on 10 days and rose by more on 15, about once a month each way.

Spreads are set by each broker and widen when market depth thins, by amounts that vary by broker and account type.

Three documented episodes show how far GBP/USD can travel against a small account. The worked examples use a $5,000 account at 1:100 leverage and 1 standard lot at $10 per pip. Prices are ECB reference fixings, with GBP/USD derived as EUR/USD ÷ EUR/GBP.

The pattern across all three: the dollar value of each pip is set by position size, not by the leverage ratio, and two of the three moves began with a UK event that EUR/USD did not share. On the 2016 card, a standard stop-loss order leaves one risk in place: after a sharp move the fill comes at the next available price, beyond the stop's level.

GBP/USD followed EUR/USD more closely than any other dollar major across 2025, at a daily correlation of +0.82 in the ECB fixings, ahead of NZD/USD at +0.73 and AUD/USD at +0.69; USD/CHF (−0.65), USD/CAD (−0.66) and USD/JPY (−0.53) moved against it, because the dollar is their base currency. The link is close to arithmetic: GBP/USD equals EUR/USD divided by EUR/GBP, so in log terms each day's GBP/USD change is the EUR/USD change minus the EUR/GBP change, exactly.

A correlation of +0.82 is still a partial hedge. Holding a short EUR/USD position against a long GBP/USD position, each sized so it swings the same dollar amount, leaves √(2 − 2 × 0.82) = 0.60 of one position's swing open: what remains is the EUR/GBP move, which neither leg offsets. That residual is largest on exactly the days the hedge is meant for, the UK-specific events, and the two positions pay two spreads and carry two swaps.

GBP/USD at 1.3335 on a USD account, 1 standard lot (100,000 GBP, $133,350 notional). The margin reserved depends on leverage, and because the lot is denominated in pounds it also moves with the price:

The pip value is the fixed part. With the dollar as the quote currency, each pip on 1 lot is $10 on a USD account at any price; the margin is the part that moves, $1,333.50 at 1.3335 and 1:100, but $1,486.90 at the 2016 referendum-day fixing of 1.4869, taken before the result. Leverage changes neither the pip value nor the position: it sets the margin held and, with it, how far the price can move before the broker's stop-out closes the position.

Spread cost per round trip. With an assumed 1.0-pip spread on a standard account (spreads are set by each broker and vary by account type and time of day), a round trip on 1 lot costs $10.00. A raw-spread account at an assumed 0.3 pips plus an assumed $7.00 round-turn commission also costs $3.00 + $7.00 = $10.00: on these assumptions the two account types break even, and raw pricing comes out cheaper only when the commission is smaller than the spread it removes.

Swap on each side. With Bank Rate at 3.75% and the upper limit of the US federal funds target range at 4.00%, a long GBP/USD position earns sterling interest and pays dollar interest. Sterling accrues on a 365-day year and the dollar on a 360-day year, so with no broker markup 1 lot long earns $13.70 and pays $14.82 a night, a net debit of about $1.12, and the short side earns the same $1.12. Brokers deduct a markup from the side that earns and add it to the side that pays. At an illustrative total markup of 0.5–1.5% a year, an assumption rather than a published broker figure, the long side pays about $2.96 to $6.63 a night and the short side pays about $0.72 to $4.40. Wednesday's rollover, typically 17:00 New York time and set by the broker, charges three nights at once unless a bank holiday moves the settlement dates: about $8.87 to $19.90 for a long and $2.17 to $13.21 for a short. Every figure moves when either central bank changes its rate, and the broker's swap table gives the figure that applies on a given night.