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Cable in Forex Trading

In forex trading, "Cable" is a term used to refer to the exchange rate between the British pound (GBP) and the U.S. dollar (USD). The term originated in the mid-19th century when the exchange rate between the two currencies was transmitted via transatlantic telegraph cables. Today, "Cable" is still commonly used by forex traders to denote the GBP/USD currency pair.

Example

A forex trader might say, "Cable is trading at 1.35," meaning the GBP/USD exchange rate is 1.35, indicating that one British pound is worth 1.35 U.S. dollars.

Key points

• "Cable" refers to the GBP/USD currency pair in forex trading.

• The term dates back to when exchange rates were transmitted via telegraph cables.

• It remains one of the most actively traded currency pairs in the forex market.

Quick Answers to Curious Questions

The term originated from the transatlantic telegraph cables used to transmit the exchange rate between the British pound and U.S. dollar in the 19th century.

It is significant due to the global importance of both the British and U.S. economies, making it one of the most actively traded pairs in the forex market.

Because it is a highly liquid pair, movements in the Cable can influence other currency pairs and overall market sentiment, especially during major economic events.