Pound Sterling Chinese Yuan (GBP-CNY) Exchange Rate Advances Rapidly on UK?s Political Transition

Pound Rates against the Yuan Climb as Conservative Leadership Concerns are Placated

Although the Pound has been decidedly soft against most of its peers over the past week, the present one has seen a steady appreciation for the Pound on account of the UK’s fast-moving political developments.

Sterling initially jumped on Monday morning, when Conservative leadership contender Andrea Leadsom dropped out of the running, leaving Theresa May as the default winner and presumed leader of the country.

Then-Prime Minister David Cameron triggered a sustained rally for the Pound on the close of Monday and all across Tuesday, when he confirmed that not only would May be PM, but that she would be taking over as early as Wednesday, instead of at the start of September, as had originally been scheduled.

Over Wednesday, on the day of May’s swearing in as PM, however, the Pound has slumped overall. This may be on account of high tensions among investors as the Bank of England (BoE) interest rate decision for July, the first since the EU Referendum, is due on Thursday. Current forecasts have been for some form of cut, whether from 0.50% to 0.25% or even lower to a flat 0%.

Chinese Yuan Slides in CNY-GBP Pairing as Domestic Data Misses on Three Strikes

While it has actually had notable domestic data released this week unlike the UK, China has nonetheless failed to benefit from its home economic announcements.

For the foreign direct investment printing on the year in June, a rise from 3.8% to 5.1% has been recorded, although more recently the nation’s trade balance, export and import printings have all slumped.

The trade surplus for June remains positive, in spite of a dip from 49.98bn to 48.11bn. With exports on the year in June, a slip from -4.1% to -4.8% has been recorded, while for the imports figure over the same period, a far greater slide from -0.4% to -8.4% has been recorded.

Although not directly linked to the economy, China’s woes have only been added to recently by a UN ruling that has rubbished wide-spread historical claims that China has attempted to exert on the South China Sea.

Looking ahead, the Yuan may be in for turmoil on Friday, when the national GDP growth rate for Q2 is announced. At present, a rise from 1.1% to 1.2% is expected on the quarter, though alarmingly, the more-impactful annual result has a reduction from 6.7% to 6.6% on the cards.