Definition – What does British Pound Sterling (GBP) mean?
The British pound sterling (GBP) is the official currency used in the United Kingdom. The pound sterling is considered to be one of the major currencies and is paired with all the other major currencies, including the U.S. dollar (USD), Japanese yen (JPY), Swiss franc (CHF), euro (EUR), Australian dollar (AUD) and Canadian dollar (CAD). It also acts as a base currency for many less commonly traded and exotic currencies.
ForexTerms explains British Pound Sterling (GBP)
The United Kingdom is one of the world’s largest economies. Although it is a member of the European Union (EU), the UK has chosen to keep the pound sterling as its currency. The economy of the UK is very similar to the U.S. in that services play a larger role than commodities.
The pound sterling had the unfortunate role of being the target currency of the greatest currency trade in history. On September 16, 1992, currency speculators lead by George Soros forced the British government to pull out of the European Exchange Rate Mechanism (ERM) – a precursor to the EU and euro. Soros made over $1 billion on the trade and went down in history as the man who broke the Bank of England.
Since then, the pound sterling has struggled with stability due to debt issues that have plagued many EU members.