Cable
The GBP/USD (British pound/US dollar) pair. It earned its nickname because the rate was originally transmitted to the US via a transatlantic cable from the mid-1800s, when the pound was the currency of international trade.
Related terms
Sterling
A nickname for the British pound or the GBP/USD (British pound/US dollar) currency pair.
Read full definitionCurrency Pair
Two currencies quoted against each other, such as GBP/USD. The first is the base currency and the second the quote currency; the price shows how much of the quote currency one unit of the base is worth.
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Spot Rate
The current market exchange rate at which one currency can be bought or sold for immediate delivery. Spot trades typically settle two business days later (T+2).
Read full definitionForward Contract
An agreement to exchange a set amount of one currency for another at a fixed rate on a future date. It locks in today’s rate, protecting a business from adverse currency moves before a payment falls due.
Read full definitionFX Swap
The simultaneous purchase and sale of the same amount of a currency for two different value dates, typically a near leg at spot and a far leg forward. It is used to roll a hedge forward or manage short-term cash-flow timing.
Read full definitionBid-Ask Spread
The difference between the price at which the market will buy a currency (bid) and the price at which it will sell (ask). A tighter spread means lower transaction costs.
Read full definitionPip
The smallest standard increment by which a currency pair moves, usually the fourth decimal place (0.0001). Pips are the common unit for quoting spreads and price movements.
Read full definitionSettlement (T+2)
The point at which both sides of a currency trade actually exchange funds. Most spot FX settles two business days after the trade date, written as T+2.
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