When forex traders mention “cable,” they are in fact referring to the British pound sterling, and equally often to the exchange rate for U.S dollar to the British currency. The slang has been useful in the market floor in minimizing frequent comparison of the British pound sterling against the U.S dollar, also common with other major foreign currencies. The trading jargon started out in the 1800s. The dollar/pound exchange rates’ main transmission then was through the TransAtlantic Cable, a steel cable that is laid underneath the Atlantic Ocean, which enabled messages containing currency prices to be sent from London to New York.

In the forex trading industry, “cable dealers,” a common epithet referring to the forex brokers, are on the lookout for the “cable going up” or “cable trending lower,” as the term functions in a phrase.

Now that the jargon has been clearly decoded, what forex brokers need to know is how active and significant the forex cable is in the forex trading.

In the late 2006 and 2007, the Bank of England raised interest rates causing the forex cable, the British pound sterling, to appreciate. It was during this period when a depreciation of the US dollar occurred. It was on April 2007 when the pound hit 15-year high against the US dollar. It reached US$2, a record-setting figure ever since. With its continued appreciation against the dollar, it hit a 26-year high $2.1161 on November 2007. Although the global financial crisis has caused the pound sterling to depreciate suddenly, economists have strategized well enough for an upsurge, thus the stability and continued appreciation of the forex cable. One pound sterling was worth US$1.451 or ?1.023 as of December 29, 2008.

There has been a constant and free buying and selling of the forex cable in foreign exchange markets around the world. These activities have resulted to the fluctuation of the forex cable’s value relative to other currencies. In the process is a continuing rise of value upon the traders’ buying of pounds. The forex cable has traditionally been very active in the market that it has become one among the world’s highest-valued currency values.

The pound is not considered a major international reserve currency for nothing. Over the recent years, there has been a major increase in the pound’s percentage for the total reserve; a growth attributed to the stability of the British economy and the gradual increase in the pound’s value against many currencies. Compared to other currencies such as the dollar, euro, and yen, the forex cable possesses the highest interest rates – a great enough reason for beginners to consider investing on forex cable trading.

The pound is considered by most investors around the world as a stable high-yield proxy to the euro. The popularity of the cable forex trading is an indication of the forex cable’s continuous upsurge against other currencies such as the US dollar, an equally popular giant in foreign exchange. For a beginner in the trade, a promise of a consistent and stable market could be found in the forex cable.