Why Is the GBP/USD Pair Called "Cable"?

The GBP/USD is one of the most actively traded currency pairs in the global foreign exchange market. The pound sterling (GBP) is the base currency, and the USD (U.S. dollar) is the quote currency. In other words, the GBP/USD represents the amount of U.S. dollars it would take to exchange for one British pound.

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Historical Origins of the Term "Cable"

Before everyone could check the exchange rate between currencies with just a few clicks on an app, investors needed to utilize telegraph cables. Indeed, a 2018 report revealed that the transatlantic telegraph significantly bolstered trade over the Atlantic and cut costs for businesses, consumers, and investors.

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The Birth of GBP/USD as the "Cable" Pair

So, you might be wondering exactly why the GBP/USD pair is referred to as "cable." This was a well-known nickname dating back to the 19th century when dollar-pound trade was completed through transatlantic cable. In fact, the GBP/USD was the first currency pair to be transmitted through telegraph between the New York and London financial markets.

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Significance of the Name Today

Two hundred years later the term "cable" is still alive and well, widely used across the global financial markets. Traders are taught the historical significance between the pound and greenback and how much it facilitated and advanced global trade, further highlighting the strong economic ties between the United States and the United Kingdom. Technology has transformed how the world trades, but "cable" still maintains a notable and historical significance in the financial markets.

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