The pound is called a murder currency as explained in the article below. There are many cases where the price movement is so intense that when you notice it, you have lost a lot. So you have to be careful how you handle pounds. So when you take pound yen and pound dollar, which one is recommended as an investment?
The pound-dollar price movement is easy to stabilize
The biggest feature of the pound dollar is that it tends to be stable in price movements. The pound dollar has been in a range market since around 1970. Below is the monthly chart from 1970 to 2023. There is no big trend, it goes up and down repeatedly. The pound-dollar has the characteristics of the third largest trading share in the foreign exchange market. Because it is actively traded, unilateral price fluctuations are less likely to occur. When a unilateral movement occurs, there is always a tendency for a supporting force to act.
The pound yen is a speculation
It is clear that the pound-yen is no longer trending compared to the pound-dollar. The chart below is monthly from 1970 to 2023. When buying and selling GBP/JPY, trend-oriented strategies tend to work well. However, if your prediction is correct, you will make a lot of money, but if your prediction is wrong, you will be overwhelmed. As GBP/JPY is a very minor currency pair, it is prone to one-sided trends. This is where the pound dollar is different.
Difference between pound dollar and pound yen
Even when looking at the shape of the chart, there is a clear difference between the two. It is very difficult to predict the future in real time because it may fall dramatically next week. I also think that the pound is a currency that is difficult to grasp because the range is too large. I personally buy and sell major currencies, but the pound is the most difficult.
Time of price movement
In the case of the pound dollar, it is the European time that is most likely to move. The pound-dollar movement tends to occur quite violently during New York time, so this time period is the biggest target. On the contrary, most of Tokyo time is quiet range.
On the other hand, the pound-yen generally moves as well as the pound-dollar during European time, but it tends to be greatly influenced when there are announcements such as Japan’s policy interest rate and GDP, so it moves even in Tokyo time. tend to. In addition, the Japanese yen is often bought for some kind of risk aversion, so when a coronavirus shock occurs, price fluctuations are likely to occur.
dollar and yen
As far as I know, pound-dollar and pound-yen have different combinations of currency pairs, so they are affected by the United States and Japan. Therefore, they are greatly influenced by American politics and economy, and Japanese politics and economy. However, compared to the United States, Japan has little political influence.
Also, when looking at the pound-yen, you can also see the relative strength of the pound against the yen by looking at the dollar-yen and euro-yen at the same time. This is the same for the pound-dollar, and you can see the strength of the pound against the dollar by looking at the euro-dollar, pound-au-dollar, etc.
trading volume
In terms of transaction volume, the pound dollar is overwhelmingly large. The pound-dollar has the characteristics of the third largest trading share in the foreign exchange market. Therefore, if you try to make a one-sided movement, there will always be a backlash movement, so it is easy to stabilize.
In contrast, the pound yen is minor. Therefore, if it moves unilaterally, the brakes will not work, so it tends to move unilaterally and form a trend. It is a highly recommended currency pair for trend followers.
The capital efficiency of the pound-yen and pound-dollar is high
It can be said that the capital efficiency of the pound-yen and pound-dollar is very high. because it works well. The pound is likely to make a lot of money with a small amount of money. In other words, if you want to suddenly make a lot of money with a small amount of money, the pound will be your choice. However, the pound is more difficult to trade due to its high transaction costs. Not recommended for beginners.
Recommended XM
XM was originally known as a forex company with too wide spreads. But this was only recently. Now there is an account type called KIWAMI account. The spread is very narrow and very suitable for trading. Therefore, this account type is highly recommended. Especially for those who trade in pounds, it is recommended because the spread is extremely narrow.
| KIWAMI | Standard | Zero | |
| USDJPY | 0.7pips | 1.6pips | 1.1pips |
| EURUSD | 0.7pips | 1.7pips | 1.1pips |
| GBPUSD | 0.7pips | 2.1pips | 1.2pips |
| AUDUSD | 0.9pips | 1.8pips | 1.4pips |
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