[XM Trading: For Beginners] What is the Pound Index? world’s four major currencies


The Pound Index is an indicator for checking the average and relative strength and weakness of currencies in major chart analysis. The pound is considered one of the world’s four major currencies, along with the dollar, yen, and euro. The value of the pound alone is very high, but when trading the pound, you can understand the relative strength of the pound by looking at combinations of other pounds.

british pound

The British pound is one of the world’s four major currencies, along with the US dollar, Japanese yen, and euro, and is considered one of the major investment products. Although the American dollar is now considered the world’s reserve currency, the British pound was actually the world’s reserve currency until World War II. The term “British Empire” is nostalgic, but there is no doubt that Britain was at the center of the world. Although Britain was a member of the EU, it still continued to use its own currency, the pound. As a result, the price and value of the pound was maintained. The pound is also an important indicator in the economic indicator calendar.

Pound is a killer currency

The killer currency would be the pound. This is due to the extremely high volatility of the pound. Even if you look at the data details of past chart information, the pound’s movements are extremely large compared to the US dollar. Therefore, if you are a beginner, you will lose a lot of money, so it can be said that it is a currency for experienced people from intermediate level onwards. The pound dollar, pound yen, and pound Australian dollar are very popular, but be careful when trading them. If you choose to buy and trade pounds at the time of economic indicators, you will suffer quite a lot.

What is the Pound Index?

The Pound Index is an index that shows the value of the pound relative to other major countries’ currencies. If the number is rising, it means that the value of the pound is rising, so the pound is appreciated in the market, and if the number is falling, it means that the interest rate or value of the pound is falling, so the pound is appreciated in the market. It will be cheaper. In the actual exchange market, when trading not only stock prices but also pounds futures in the market, it is common to use and check the following.

relative strength of the pound

For example, if the pound-dollar is buying the pound and the pound-yen is buying the yen, the power relationship is established as JPY > GBP > USD. By looking at multiple pound combinations in this way, you can gauge the overall relative strength of the pound. Of course, it is important for traders to see the strength of this pound. Pound is not only pound dollar, but there are various combinations such as euro pound, pound Australian dollar, pound yen. By looking at multiple currency pairs in this way, we can see the relative strength of the pound and whether it is in a buying or selling direction.

currency index

The same goes for other currencies, not just the Pound Index. There is a dollar index, a yen index, a pound index, and even a euro index. Of course, these are indices that show the overall value of each country’s currency relative to other currencies. A currency index allows you to see the overall fluctuations in a currency. The pound, which has a high value as a financial instrument, is often used as an indicator for chart analysis.

XM is recommended

At XM, you can trade not only precious metals, virtual currencies (crypto assets), and stocks, but also foreign exchange. KIWAMI, an account type with even narrower spreads, has also been introduced. Therefore, it can be said that it is a highly recommended FX company for trading. Security is solid, and support desk services are excellent.


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