British Pound futures (6B) at CME Group allow you to take positions on the value of the British pound sterling currency versus the U.S. dollar.
Once the world’s leading currency, the pound lost its preeminence with the dissolution of the British Empire in the 1940s. Because the U.K. remains the sixth largest economy and London is a financial hub, the pound remains the third-most widely held reserve currency and the fourth-most widely traded currency.
Each British Pound futures contract represents 62,500 British pounds with a minimum price fluctuation of .0001 per British pound increments. The contract trades Sunday-Friday from 5 p.m. to 6 p.m. Central Time (CT) with a daily 60-minute break at 4 p.m. CT.
This GBP/USD pair represented by 6B is frequently traded, very liquid and characterized by tight bid-ask spreads and nearly nonexistent arbitrage opportunities.
Therefore, investors that wish take a position on the pound are well advised to understand the relative strength between the British and U.S. economies and their interest rates. Stronger British economic performance often translates to a higher pound against the dollar.
Conversely, the dollar typically strengthens against the pound when the U.S. economy outperforms Britain’s. As such, market participants should follow releases on broad economic data such GDP, retail sales and inflation as well as any statement issued by either the Bank of England or the Federal Reserve.
Finally, with New York and London both serving as global financial hubs, industry-specific news concerning U.S. or British banks could also impact the contract’s value.