Use USDGBP or GBPUSD?

[Zhao_Xu_78Wlv (Zhao Xu)]

Course Name: Short Selling in Trading, Section No: 3, Unit No: 7, Unit type: Video



In this video, I think the forex rate should use "GBPUSD".

Reason:

The stock price unit here is "US$", want convert to Pound, then US$/GBPUSD can get.

If US$/USDGBP, what is the result? For example one sample rate of USDGBP is 0.62,

US 1$ / 0.62 = 1.62 but what is the unit of "1.62"?

[Satyapriya_Chaudhari_63X1f (Satyapriya Chaudhari)]

Hi Zhao Xu,



Here we are multiplying the benchmark index with the exchange rate. Hence we have used USDGBP. To convert USD to GBP, you can either multiply by USDGBP or divide by GBPUSD. 



For example, suppose you want to convert $100 to Pounds.

1. Using USDGBP
   
   USDGBP = 0.72
   
   Thus, $100 = 100 * 0.72 Pounds = 72 Pounds
   
   
   
2. Using GBPUSD
   
   GBPUSD = 1.39
   
   Thus, $100 = 100/1.39 Pounds = 72 Pounds 
   
   
   
   Hope this helps.