What is cable in forex? GBP/USD explained
If you have heard a trader say "cable is up" or "I sold cable at the open", they were talking about GBP/USD, the British pound against the US dollar. It is one of the most traded currency pairs in the world and one of the oldest nicknames in the market. This guide explains where the name comes from, how to read a cable quote, what one pip is worth, what moves the pair and the mistakes people make when they first trade it.
Why GBP/USD is called cable
In the nineteenth century a telegraph cable was laid across the floor of the Atlantic Ocean to connect London and New York. Once it worked reliably, the exchange rate between the pound and the dollar could be sent between the two financial centres in minutes rather than the weeks a ship needed. Dealers began to call the rate itself "cable", and people who traded it were sometimes called cable dealers.
Prices now travel through fibre optic lines and satellites, but the name stayed. On a dealing desk, in a market report or in a Telegram channel, cable still means one thing: the pound priced in US dollars.
Cable only means pound against dollar
The nickname is specific. When the pound trades against any other currency, traders call it sterling instead. EUR/GBP is "euro sterling" and GBP/JPY is "sterling yen". Saying "cable yen" is a quick way to sound new to the market. Other major pairs have their own nicknames too, shown in the table below.
| Pair | Nickname | Character in brief |
|---|---|---|
| GBP/USD | Cable | Liquid, usually moves further in a day than EUR/USD, sensitive to UK data and the Bank of England |
| EUR/USD | Fiber | The most traded pair, tight spreads, driven by the ECB and the Fed |
| USD/CHF | Swissie | Often moves opposite EUR/USD, the franc is seen as a safe haven |
| AUD/USD | Aussie | Linked to commodities and risk appetite |
| NZD/USD | Kiwi | Similar drivers to the Aussie, thinner liquidity |
| USD/CAD | Loonie | Sensitive to oil prices and the Bank of Canada |
How to read a cable quote
GBP is the base currency and USD is the quote currency. A price of 1.3270 means one pound buys 1.3270 US dollars. If you buy cable you are buying pounds and selling dollars, so you gain if the pound strengthens. If you sell cable you gain if the dollar strengthens against the pound.
Your broker shows two prices, a bid and an ask. You sell at the bid and buy at the ask, and the gap between them is the spread. On cable the spread is normally small during London and New York hours and wider late in the evening, around news releases and over the weekend open. Our guide on how to read a forex quote covers this in more detail.
What one pip on cable is worth
A pip on GBP/USD is the fourth decimal place, 0.0001. Because the dollar is the quote currency, the pip value is fixed in dollars:
- Standard lot (100,000 pounds): about 10 dollars per pip.
- Mini lot (10,000 pounds): about 1 dollar per pip.
- Micro lot (1,000 pounds): about 10 cents per pip.
If your account is in pounds, divide the dollar value by the current exchange rate. At 1.3270, 10 dollars is roughly 7.54 pounds per standard lot. The pip value calculator does this for any pair and account currency.
The trap is that cable has the same pip value per lot as EUR/USD while often covering more pips in a day. The same lot size therefore tends to carry more risk on cable. Always size the trade from the stop distance, not from habit.
What moves cable
Cable sits between two economies and two central banks, so news on either side of the Atlantic can move it.
- The Bank of England. Rate decisions, the vote split of the Monetary Policy Committee and speeches by its members. Our article on central bank rate decisions explains how these days usually unfold.
- The Federal Reserve. Fed decisions and guidance move the dollar against every major currency, cable included.
- UK data. Inflation, wages and the labour market, GDP, retail sales and business surveys.
- US data. Nonfarm Payrolls, CPI inflation and other releases that change expectations for US rates.
- Politics and the budget. UK fiscal events and political surprises can move the pound sharply, sometimes outside normal data times.
- Risk appetite. In periods of stress the dollar often gains as a safe haven, which tends to push cable lower.
The best hours to trade cable
Cable is usually most active when London is open. The London open often brings the first real move of the day, and the hours when London and New York overlap, roughly 1pm to 5pm UK time, combine UK and US participants with most of the major US data releases. During the Asian session the pair tends to move less, and spreads can be wider. The London and New York sessions guide and the market sessions clock show the times in your own zone.
Common mistakes when trading cable
- Stops that are too tight. A stop placed a few pips from entry is often hit by normal movement. Place the stop beyond a level that would prove the idea wrong, then reduce the size to fit.
- Trading through a Bank of England decision without a plan. Spreads widen and price can jump. Decide in advance whether you stay in, reduce or stand aside.
- Using EUR/USD lot sizes on cable. Same pip value, wider swings. Recalculate every time with the lot size calculator.
- Forgetting the dollar side. A strong UK number can be overwhelmed by a stronger US release on the same day.
- Chasing the London open. The first move is not always the real one. Waiting for a level to hold or break can save a poor entry.
A simple checklist before a cable trade
- Check the calendar for UK and US releases and any Bank of England or Fed speakers.
- Note the session: London, the overlap, or the quieter Asian hours.
- Set the stop beyond a meaningful level and size the position from that distance.
- Choose your targets and how you will manage them before you enter. Our guide to the take profit ladder shows common ways to split a position.
- Write the trade in your journal, including the reason for it.
Cable trade ideas from Forexuro
Forexuro publishes GBP/USD trade ideas with an entry, a stop loss and three targets, and every closed cable signal goes into the public trade history, losses included. See how we approach the pair on the GBP/USD signals page, or watch a few signals for free on the Telegram channel before deciding anything.
Frequently asked questions
Why is GBP/USD called cable?
The nickname comes from the transatlantic telegraph cable laid under the Atlantic in the nineteenth century, which carried pound and dollar exchange rates between London and New York. The cable is long gone, but the name stayed.
Is cable the same as sterling?
Not quite. Cable means only the pound priced in US dollars. When the pound trades against other currencies, such as the euro or the yen, dealers call it sterling, for example euro sterling for EUR/GBP.
What is the pip value of cable?
One pip on GBP/USD is 0.0001. For an account in US dollars that is about 10 dollars per standard lot, 1 dollar per mini lot and 10 cents per micro lot. For an account in pounds the value changes with the exchange rate.
When is the best time to trade cable?
Cable is usually most active from the London open and through the hours when London and New York are both open, roughly 1pm to 5pm UK time. The Asian session is normally quieter for the pair.
Keep reading
The major currency pairs · London and New York sessions · GBP/USD signals