This currency pair is also known as 'cable' owing its name to the undersea cable that transmitted prices between London and New York many years ago.
GBP/USD Market Influences
Interest rates play a major role when the idea of evaluating one currency against another comes in to play. The interest rate determines the capacity of earning for a particular currency. Inflation influences the interest rates greatly. If interest rates of a country are rising because of a healthy economic growth that is a positive sign for the currency. It has to be kept in mind that the value of a particular currency always reflects its buying power.
The forex market came into existence to facilitate trade only, and trade is a major factor in the determination of the value of a particular currency. Greater demand for goods means higher values for that currency. This influence forces the forex dealer to keep a close eye on international trade data. Capital flows indicate the investment of capital in that country. Investment also works on the same pattern as trade. If a country receives a lot of investment its currency would be in great demand. The forex dealers look at the capital flows in the same way as they look at the trade data.