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Everything to know about GBP – A Quick Guide

The British Pound is a currency used by many individuals worldwide for sending money abroad to different countries. It has remained stable for many years. The GBP is a very reliable currency and has been considered a haven by some investors. However, the British Pound recently experienced a significant decline, pushing inflation expectations to increase.

The trading pattern was a clear bearish engulfing pattern that formed on the daily chart for GBP after a long downward trend. The bearish engulfing pattern is a technical indicator used to predict the decline of GBP.

The main drivers for this prediction were:

-There was confirmed neckline support in place on the daily timeframe, representing a clear resistance level after the neckline resistance was also broken down. It supported further falls, with targets placed at the horizontal support level.

-The downward channel that was being formed also supported this call. Any support levels being broken down are likely to cause further declines, as there will be no reason for an upward bounce.

-There was solid bearish momentum in the hourly time frame, which served as confirmation of a possible forthcoming decline. 

 It is closely connected to trading and traders around the globe, making it one of the world’s major currencies. Just as other countries have a historical element to their currency, GBP is no different.

So, here is a quick guide for you to know everything about GBP.

Historical Importance

The GBP refers to “British Pound Sterling”, which is derived from the Latin word “Poundus”, meaning weight. It was accorded as United Kingdom’s official currency when Scotland and England were united to create a single country in 1707. This very currency dates back to the year 760, giving it the title of the oldest currency still in use by modern financing institutes. 

It is a fact that several countries of the world were colonised by the British, eventually leading to the GBP becoming their official currency. Australia, Canada and New Zealand are a few notable countries colonised by the British and where GBP was used as the official money. Before the official printing of GBP currency in 1855 by The Bank of England, notes were made handwritten or printed manually.

What does GBP stand for?

GBP, also referred to as the British pound sterling, is the official currency of the United Kingdom and its authorised territories of Channel Island, South Georgia, the Isle of Man, British Antarctic Territory, and the South Sandwich Islands. The complete official form of GBP might be the Great Britain Pound, but it is mainly known to traders as STG or ‘sterling’ in foreign exchange and accounting. GBP is not only used by the British but also holds the significance of being the official currency of Zimbabwe, along with the Zimbabwean dollar. Various currencies are attached to GBP, some of them are: 

  • Jersey Pound
  • Gibraltar Pound
  • Guernsey Pound
  • Scotland Notes
  • Falkland Islands Pound
  • Northern Ireland Notes
  • Manx Pounds. 

Unit of GBP

GBP or pound is broken down into smaller units; Penny sterling is a quarter pound or GBP, and pence is its plural. A hundred pence equals one pound, and its abbreviation is p. Traders use pence as a source for investing in several stocks. Most stock exchanges use GBP or GBX to ensure that the stocks are traded in pence and not in pounds. 

Symbol and ISO code

The ‘£’ symbol originates from an ornate L in Libra, which is like an embellishment of the zodiac sign. The ISO currency code for pound or sterling is ISO 4217 or GBP. An ISO is a code issued by the International Organization for Standardization that identifies alpha and numeric codes for world currencies.

How is GBP different from other currencies?

Sterling, the fourth most traded currency, has historical significance covering almost a quarter half of the world. It is unique in its sense of its exchange rates, trading values and its distinctive production. According to Hong Kong and Shanghai Banking Corporation Limited (HSBC), GBP has the highest exchange rates for the year 2021. The GBP currency stands at a stunning level due to long-term movements distinguishing it from the US dollar. Another difference that makes GBP unique is its trading value compared to other currencies. It stands as the fourth most traded currency in the world. Many foreign workers and expatriates in the UK exchange GBP for their local currencies daily when they need to transfer money to their families back home.

As for its production, ‘British Crown Dependency’ countries such as Guernsey, the Isle of Man and Jersey produce their equivalent sterling, which is legalised and equal to the UK sterling in their associated regions. Several overseas workers and expatriates settled in the UK remit millions of the GBP daily when making a money transfer to support their families back home.

The GBP’s Benefits for Developing Economies 

Remittances give developing countries the hope and ability to pursue financial independence and development in their own way, raising the GDP of these countries and giving an immense contribution to their development. Developing countries that rely on remittances for their growth and development tend to produce more through these remittances and work their way to eliminating poverty which is a step towards the nation’s growth. Overseas workers living and working in the UK add tremendous value to the economic stability of their nations when they send money online from the UK to their native countries.

But just as the flush of the first pay happiness, developing countries must understand the intensity and work put in using the remittance funds effectively. For the sake of efficient use of remittance funds, developing countries must come up with strategies that help alter their unstable states and not just manifest the prosperous cities with dreams of becoming richer.

Guide to GBP Transfers

Following are answers to some of the questions raised by customers concerning the transfer of GBP around the world.

Who can I send GBP/Sterling to?

  • Customers that want to send GBP internationally or to countries outside of the UK are eligible to send GBP by using the SWIFT method.
  • By using the IBAN, starting with GB (Great Britain) can be used to send to and from the Channel Islands, Isle of Man, and Gibraltar.
  • Banks connected to CHAPS or Faster Payment Schemes are also eligible for GBP transfers.

What information about the recipient is needed?

  • The full name of the recipient is needed
  • 6-digit code
  • 8-digit bank account number 
  • IBAN can also be used as an alternative which is usually 14-34 alphanumeric long. 

How much can I send?

  • Depending upon your bank or financial institution’s limit, one can send up to 1 million GBP.

How long does it take the money to arrive?

  • It all depends on the pace of the financial institution you send your GBP through. Mostly it takes the same working day for the money to arrive once it has been received and converted.

GBP is gaining popularity day by day for its exchange rates, especially with the help of online money transfer companies such as ACE Money Transfer. Expatriates and overseas workers in the UK use ACE’s remittance services to send money online to their family and friends with the most reliable, swift, and secure money transfer facilities.

Have more queries about GBP? Ask it on ACE Money Transfer’s official website. Join now to know more about GBP.

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