In the data we used, the British pound (sterling) was at its highest against the US dollar on 23 June 2016, at $1.4800. That was the day before the UK's European Union (EU) referendum result. It was at its lowest on 26 September 2022, at $1.0703.
GBP/USD is the price of one British pound in US dollars, so a reading of 1.3371 means one pound buys $1.3371. GBP is the code for the pound. USD is the code for the dollar. The Federal Reserve Board publishes one noon buying rate in New York for the pound each trading day. We call it the close. We wrote this on 11 November 2026. The data end on 6 November 2026, when the close was $1.3371.
What moves GBP/USD? GBP/USD is the price of one British pound in US dollars. In this data, three of the five largest one-day falls came within a trading day of two UK political events. The gap between UK and US interest rates showed no straight-line link to its monthly moves.
The pound fell 7.84% in one day on 24 June 2016, when the UK announced the result of its European Union referendum, the vote on leaving the EU. It is the largest one-day fall in the data.
It fell 3.09% on 23 September 2022, when the UK finance ministry (HM Treasury) published the Growth Plan, the government's package of tax and energy policies. It reached its low on the next trading day.
Across 130 months, the correlation between monthly changes in the pound and in the interest rate gap was -0.01. A correlation of 0 means no straight-line link.
What is GBP/USD?
GBP/USD is quoted as dollars per pound. A rise means the pound has become worth more dollars.
The series covers 2,711 trading days from 4 January 2016 to 6 November 2026.
Source: Board of Governors of the Federal Reserve System, H.10 release
Chart 1 shows the daily close over the whole window.
What happened to the pound after the 2016 referendum?
On 24 June 2016, the Bank of England's Governor issued a statement saying the people of the United Kingdom had voted to leave the European Union. The pound closed at $1.3639 that day, against $1.4800 the day before. That is a fall of 7.84% in one day.
No other day in the window comes close. The next-largest one-day fall was 3.09%, on 27 June 2016, the next trading day.
The pound kept falling. Its lowest close in the rest of 2016 was $1.2155 on 28 October 2016, which is 17.87% below the close on 23 June. It ended 2016 down 16.34%.
What happened to the pound in September 2022?
HM Treasury published the Growth Plan 2022 on 23 September 2022. The pound fell 3.09% that day, to $1.0921. That was the third-largest one-day fall in the window, just behind 27 June 2016. The fourth and fifth were 2.68% on 12 March 2020 and 2.49% on 15 December 2016.
On 26 September 2022, the next trading day, the pound closed at $1.0703, the lowest close in the window.
From the close on 22 September to the close on 26 September, the pound fell 5.02%.
The Bank of England had raised Bank Rate, its main interest rate, to 2.25% on 22 September 2022. The Effective Fed Funds Rate, the rate at which US banks lend to each other overnight, stood at 3.08% on 22, 23, and 26 September. The gap did not change over those days, but the pound fell 5.02%.
What is the interest rate gap?
The rate gap is Bank Rate minus the Effective Fed Funds Rate, in percentage points. A positive gap means the UK rate is higher. A negative gap means the US rate is higher. A point is one percentage point, so 4.00% minus 3.88% is 0.12 points.
On 6 November 2026, Bank Rate was 4.00%, a level the Bank of England set on 5 November 2026. The Effective Fed Funds Rate was 3.88%. The gap was 0.12 percentage points.
Since 4 January 2016, the gap ranged from -1.70 to +0.42 points. The UK rate sat below the US rate on 59.9% of days and above it on 37.7%.
Source: Board of Governors of the Federal Reserve System; Bank of England; YX Insights
Our explainer on the Fed Funds Rate covers the US side.
Does the interest rate gap move GBP/USD?
Not in a straight line in this data. For each month-end from January 2016 to October 2026, we took the last daily reading in the month. We then measured the change in the pound, in %, and the change in the gap, in points, from the month before. That gives 130 pairs.
The correlation between the two was -0.01. A correlation of 1 means two series rise and fall together. A correlation of -1 means they move in opposite directions. If a higher UK rate relative to the US rate lifted the pound, the correlation would be clearly positive.
Source: Board of Governors of the Federal Reserve System; Bank of England; YX Insights
Chart 3 plots 130 months. The points make a cloud, with no tilt. 55 of the 130 months sit on the vertical zero line, because the gap did not change.
The gap rose in 32 months, fell in 43, and stayed unchanged in 55. The pound rose in 44% of the 32 months the gap rose. It rose in 51% of the 43 months the gap fell.
The mean monthly change in the pound was +0.05% when the gap rose and -0.33% when it fell. The two measures point in opposite directions, which fits a correlation near zero.
Does the result hold if we change the test?
We ran the test nine ways, counting the full-window result. Each of the seven variants below gave a correlation between -0.08 and 0.11.
2016 to 2019, 48 months: 0.11.
2020 to 2022, 36 months: -0.07.
2023 to October 2026, 46 months: -0.08.
Leaving out 2022, 118 months: -0.02.
Leaving out March 2020, 129 months: 0.03.
Monthly averages in place of month-end readings, 130 months: -0.04.
Gap change in one month against the pound's change in the next, 129 months: -0.04.
The ninth test compares levels in place of changes. It gave 0.26 across 131 month-ends. We do not rely on it, because two series that drift for years can line up by accident.
How do the pound and the gap compare year by year?
The table shows, for each year, the year-end pound, its change in the year, the year-end rate gap, and the change in the gap.
Year | Year-end GBP/USD | Change in the year | Year-end rate gap (points) | Change in the gap (points) |
|---|---|---|---|---|
2016 | 1.2337 | -16.34% | -0.30 | -0.60 |
2017 | 1.3529 | +9.66% | -0.83 | -0.53 |
2018 | 1.2763 | -5.66% | -1.65 | -0.82 |
2019 | 1.3269 | +3.96% | -0.80 | +0.85 |
2020 | 1.3662 | +2.96% | +0.01 | +0.81 |
2021 | 1.3500 | -1.19% | +0.17 | +0.16 |
2022 | 1.2077 | -10.54% | -0.83 | -1.00 |
2023 | 1.2743 | +5.51% | -0.08 | +0.75 |
2024 | 1.2521 | -1.74% | +0.42 | +0.50 |
2025 | 1.3447 | +7.40% | +0.11 | -0.31 |
2026 (to 6 Nov) | 1.3371 | -0.57% | +0.12 | +0.01 |
Year-end is the last daily reading of the year. 2026 runs to 6 November. The 2016 change in the gap runs from the end-2015 gap of +0.30. Source: Board of Governors of the Federal Reserve System; Bank of England; YX Insights
In 2022, the gap fell by 1.00 point and the pound fell 10.54%. In 2017, the gap fell by 0.53 points while the pound rose 9.66%. They moved the same way in 6 of the 10 years from 2016 to 2025. A coin toss gives 5 of 10 on average, so 6 of 10 is close to chance.
What does the test show?
In these 130 months, monthly changes in the gap and in the pound had almost no straight-line link. That does not show that rates never matter for the pound.
The gap uses current policy rates, not expected ones. A correlation says nothing about cause. The data cannot show what else moved on the days of the large falls. Our guide to how exchange rates work covers the wider set of forces.
So what moves GBP/USD?
In this data, three of the five largest one-day falls came within a trading day of the 2016 referendum result or the 2022 Growth Plan. They are 24 June 2016, 27 June 2016, and 23 September 2022. Political events came with the largest falls. The rate gap did not explain monthly moves.
The interest rate gap, taken one month at a time, had a correlation of -0.01 with the pound. Our explainer on interest rates and inflation covers why central banks move their rates.
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Common questions about GBP/USD
How is GBP/USD quoted?
GBP/USD is the price of one British pound in US dollars. A reading of 1.3371, the close on 6 November 2026, means one pound buys $1.3371. It is quoted as dollars per pound, so a rise means the pound has become worth more dollars.
What was the lowest GBP/USD close since 2016?
The lowest close since 4 January 2016 was $1.0703 on 26 September 2022, in the Federal Reserve Board's noon buying rates. The pound fell 3.09% on 23 September 2022, the day HM Treasury published the Growth Plan. From the 22 September close it fell 5.02%.
How much did the pound fall after the Brexit vote?
The pound fell 7.84% in one day on 24 June 2016, from $1.4800 to $1.3639. The UK had announced the result of the Brexit vote, the referendum on leaving the European Union (EU). It reached $1.2155 on 28 October 2016, which is 17.87% below the close on 23 June. It ended 2016 down 16.34%.
Do interest rates move GBP/USD?
Not in a simple monthly way, in this data. Across 130 months from January 2016 to October 2026, the correlation between monthly changes in the pound and in the UK-US rate gap was -0.01. This does not show that rates never matter, since the test uses current policy rates, not expected ones.
Is Bank Rate higher than the Effective Fed Funds Rate?
On 6 November 2026, yes, by 0.12 percentage points. Bank Rate was 4.00%, a level the Bank of England set on 5 November 2026. The Effective Fed Funds Rate was 3.88%. The UK rate sat below the US rate on 59.9% of days since 4 January 2016.
DISCLAIMER: This article is intended for educational purposes only. Any information or analysis in this note does not constitute an offer to sell or a solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice, nor should it be relied upon to make investment decisions. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice.
