Share of Forex Cable in World Market

In year 1858 a metal cable was placed to connect the foreign exchanges of London and New York. It was placed to cover whole distance below the huge Atlantic Ocean with the main purpose was transfer the current exchange rates GBP/USD. This is the chief cause that GBP/USD is the solution to the query what the forex cable is.

The link was used to transfer the changes in exchange rates telegraphically between the two nations. The two exchanges have now become two major markets which contribute majorly in the current world FX market. The exchange rate of a currency defines the unit of base currency required to purchase one unit of the quote currency. It basically defines the relation between the currencies of a pair.

The effect of advancement in science has affected every field and so is the case of transmission field. From wires and cords the medium of transmission is shifted to satellite and optic fibre. Due to high involvement and large share of US dollars in market, it is a part of almost all the major currency pairs in which dealing is done. The pair in which none of the currency is US dollar is called cross currency pair.

The market analysis is done by most of the prosperous dealers and there are a number of ways to carry out this analysis. Most of the time, this is done by continuously observing the movement of GBPUSD because they directly show the changes which occur in other currency pairs too. The GBPUSD exchange price is a strong measure to decide the state of all the currencies. Whether it moves in a positive manner or negative, the other currencies also moves according to the market condition.

Everyday market witnesses ups and downs in exchange rate of two of the world’s strongest currencies. Recently GBPUSD dropped which indicates that more units of British pounds could be purchased from same units of US dollars. Basically, GBPUSD serves as the standard for analysis future situation.

GBPUSD which represents the fluctuations in the exchange rates can be compared with a trend line and the market condition can thus be tested. The constantly decreasing rate can indicate a following breakout. A situation when decreasing GBPUSD is going below the trend line can be considered as the perfect time to go short.