britainBritain has many dialects because it consists of four countries - England, Northern Ireland, Scotland, and Wales. Britain is a constitutional monarchy with the Queen as its head of state, but it is actually managed by the parliamentary system located in the capital city of London. The UK is also a member of the European Union. However, the UK did not join the eurozone and instead insisted on using the pound as its domestic currency. Unfortunately, this means that you with a Schengen visa cannot travel to the UK, and if you want to go, you need a different visa.
UK: Facts, Data, and Characteristics
Neighboring countries: Ireland, Germany, France Area:94,058Square miles Population:63,047,162 Population density:670.3Per square mile per person Capital: London(population8,615,000) Head of State: Queen Elizabeth II Head of Government Prime Minister: Cameron(DavidCameron) Currency: GBP(GBP)Or shillings Main imports: finished products, machinery, fuel, food Main exports: finished products, fuels, chemicals, tobacco, Beckham(DavidBeckham)Cowell(SimonCowell) Import partner: Germany13.1%China9.1%The Netherlands7.5%France6.1%, USA5.8%Norway5.5%Belgium4.9%Italy4.2% Export partner: United States11.4%Germany11.2%France7.7%Ireland6.8%Belgium5.4% Time zone:GMT Website:http://number10.gov.uk Economic OverviewThe UK is the world's largest7The large economy is also the third largest economy in Europe, after Germany and France. History tells us that it is a force that needs to be considered. After all, Britain opened the door to the Industrial Revolution. In terms of trade, the UK is a net importer with a sustained trade deficit. Its largest trading partner is the eurozone, more specifically Germany. Trade activities with the eurozone account for more than half of the UK's total trade volume. From an individual perspective, the United States is Britain's largest trading partner. The UK is also the location of the world's oldest and important financial center. We're referring to London! Having a financial center like London amplifies the UK's role in global trade. Monetary and fiscal policiesThere is a small point you need to remember: the oldest bank in the world is the Bank of England(BOE). At that time, the UK was experiencing economic expansion, and government leaders realized that they needed an entity to help them promote international trade. As a result, the Bank of England was born. stay1694In, the Bank of England was established with the aim of promoting trade and growth. The main purpose of the Bank of England's monetary policy now is to maintain price stability while increasing employment rates. The Bank of England's target inflation rate is2.0%Through the Consumer Price Index(CPI)To measure. In order to achieve its goals, the Bank of England can change interest rate levels. The department responsible for interest rates in the Bank of England is the Monetary Policy Committee(MPC)。 MPCMonthly meetings are held and changes in monetary policy, including interest rate changes, are announced after the meeting. Like everything else in the UK, interest rates have a nickname in the UK - the bank repurchase rate. Bank of EnglandMPCThe main monetary policy tools applied are bank repurchase rates and open market operations. The bank repurchase rate is set by the Bank of England based on its own market operations, with the aim of helping to achieve inflation targets. wheneverMPCChanging this interest rate will affect the interest rates of commercial banks. This will affect the expenditure and output of the economy, thereby affecting costs and prices. Like other central banks, if the Bank of England raises the repurchase rate, its purpose is to curb inflation. On the contrary, if it lowers interest rates, it indicates that it wants to stimulate economic growth. When the Bank of England adopts open market operations, it changes the money supply in the market by buying and selling bonds or securities priced in sterling. This is one of the alternative methods to increase liquidity in the financial market. If the Bank of England believes that it needs to stimulate economic growth, it will "print more money" and then bring that money into the market by purchasing government or corporate bonds. On the contrary, if the Bank of England feels that the economy is developing well, it will sell more securities and "recoup" the money in the market. Understanding Pound SterlingThe pound must be a very popular child because it has many aliases. In addition to being called shillings and pounds, pounds are also called cables(pound/dollar)And peacock fish(pound/Japanese yen). Impressive, huh? Active tradingpound/USD isforeign exchangeThe most active currency pair in the market. Why? Remember, London has long been one of the world's major financial centers, with a large number of transactions and frequent cash inflows and outflows every day. In addition, GBP/The US dollar accounts for half of the world's daily trading volume14%Make it the third most attractive currency pair. That may be why the pound/The spread between the US dollar and the euro/USD and USD/The reason why the yen is one or two points higher. Higher returns Many large companies are headquartered in London, and there are many highly attractive investments in the UK market. At the same time, due to the usually high interest rates in major currencies, investors find British securities particularly attractive. In order to buy these assets, they need to purchase pounds. Fluctuation periodpound/The trading volume of the US dollar is the highest during the European period, and in the New York period, when data from the UK and the US are released, there is also potential for significant volatility in the pound. During the Asian period, its changes were not significant as most European traders were still resting, while American traders had just finished a day of trading. High volatilityThe pound sterling currency pair tends to experience more drastic fluctuations because it has lower liquidity compared to the euro. As market liquidity decreases, the pound is trapped, especially when there is a large amount of buying and selling. Compared to other currency pairs, the pound sterling currency pair has a stronger response to unexpected data.Important economic data related to the pound sterlingConsumer Price Index(CPI)：The Bank of England measures inflation based on this. It reflects changes in the prices of daily consumer goods. Unemployment rate:This data reflects the number of unemployed people in the UK economy. Analysts usually study this data very carefully as it is a leading indicator of future expenditures. Why? If a person doesn't have a job, they don't have money. Without money, no one goes to have afternoon tea! gross domestic product(GDP)：This data reflects the state of the UK economy. It will show whether the British economy is thriving or stuck in the English Channel and drowning. Purchasing Manager Index(PMI)：This index surveys procurement managers and asks them for their views on the current economic situation. Reading exceeds50.0Indicating improvement in conditions, economic expansion, below50.0It suggests that the economy may be in a state of contraction. GFTConsumer Confidence Report:This report measures consumers' confidence in current and future economic conditions. The higher consumers' confidence in the UK's economic situation, the more willing they are to consume. What factors affect the trend of the pound? Changes in monetary policyMany investors are paying attention to sterling in search of high return assets and arbitrage trading.MPCThe change in interest rates will change the market's sentiment towards the pound, as the change will affect the returns on UK securities. In addition, the changes in bank repurchase rates reflect the Bank of England's view on the economic outlook. If Bank of England officials feel that the economy is suffering, they will either expand quantitative easing measures or lower interest rates, which will send a signal to the public that the UK economy is unstable. If the Bank of England feels that the economy is on the rise and will lead to inflationary pressure, they will reduce quantitative easing or increase interest rates.Development of the Eurozone and the United StatesLike other currency pairs, the pound sterling/The US dollar is influenced by the development status of the eurozone and the United States. The US economic data directly affects the sentiment of investors and traders in the market. The quality of US data may increase market participants' risk appetite towards the pound, or it may lead them towards risk aversion and a shift towards the safe haven of the US dollar.overflow effectThe eurozone is a very important member of the UK's trading partners. Therefore, you should also keep an eye on the development of the European continent at all times(Remember, Britain is an island country!). Any bad news or poor economic performance could lead to a bearish outlook on the pound. Affected by risk preference Although small, the pound benefits from higher interest rates than other major currencies. When traders seek high returns, they will look towards the UK, as their investments have great potential for high returns. When traders abandon high return investments, they will turn to their beloved dollars and sell pounds.pound/USD tradingpound/The trading volume in US dollars is measured in pounds sterling. A standard hand is10Ten thousand pounds, a mini hand is1Ten thousand pounds. The value of each point is measured in US dollars, in pounds sterling/Calculate the current price of the US dollar. Gains and losses are priced in US dollars. For a standard hand, the change value of each point is10USD. For a mini hand, the variation of each hand is1USD. The calculation of margin trading is based on US dollars. For example, if the pound/The current exchange rate for the US dollar is1.5000The leverage ratio is100:1The minimum margin required for trading a standard hand should be1500USD. However, with the pound/The rise in the US dollar exchange rate will increase the demand for US dollar deposits. On the contrary, the required amount of USD margin will decrease.pound/US dollar trading techniquesThe first method of trading pound sterling currency pairs is to pay attention to the time of report release. The pound's response to economic reports is relatively strong. For example, if the UKGDPThe value is higher than expected, which may lead to a significant increase in the pound. Even if you come in late, you can still earn profits because the pound has risen a lot. But be careful - pounds/USD and GBP/The Japanese yen is the most volatile of all major currency pairs. In fact, pounds/Average daily movement of US dollars160Point. Due to the intense fluctuations in the pound, you may want to establish a wider stop loss order to resist significant market fluctuations.
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