The term cable is a slang term used by forex traders to refer to the exchange rate between the
pound sterling and
US dollar. The term originated in the mid-19th century, when the exchange rate between the US dollar and sterling began to be transmitted across the Atlantic by a
submarine communications cable. Since that time the exchange rate has been referred to as the cable.
The first
Transatlantic Cable was laid under the Atlantic Ocean in 1858, but it failed after only about a month of fitful service. The first truly successful cable across the Atlantic was completed in July 1866, reliably transmitting currency prices between the
London and
New York City Exchanges. The first such exchange rate to be published in ''
The Times'' appeared in their issue of 10 August 1866.
Transatlantic communications are now mainly carried by
optical fibre
An optical fiber, or optical fibre in Commonwealth English, is a flexible, transparent fiber made by drawing glass (silica) or plastic to a diameter slightly thicker than that of a human hair. Optical fibers are used most often as a means t ...
cables, supplemented to a small degree by
satellites, but forex traders' nickname for the sterling/dollar pair still harks back to the old days of copper telegraph cables.
References
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Foreign exchange market