Chinese Yuan to Pound (CNY/GBP) Exchange Rate Steady on Mixed GDP Data
Recent Chinese GDP data hasn’t been entirely positive, but the Chinese Yuan (CNY) has still advanced against a weaker Pound (GBP) regardless.
It is reported that Chinese GDP growth has slowed in Q3 2018, on the quarterly and annual readings.
While the yearly drop from 6.7% to 6.5% puts growth below the expected 6.6% printing, the quarterly dip from 1.7% to 1.6% has beaten estimates for a decline to 1.5%.
Worries about Brexit related Business Disruption Cause GBP/CNY Exchange Rate Losses
Pound Sterling (GBP) has fallen near to a two-week low against the Chinese Yuan (CNY) today, hitting an interbank exchange rate of CNY9.02.
This depreciation puts the pound below October’s best exchange rate of CNY9.17 and has been caused by growing uncertainty about the impacts of Brexit on the UK economy.
European Summit Brings Hope of a Negotiated Solution
Yesterday brought a mixture of Brexit news for GBP traders to process – on the positive side, EU leaders supported finding a workable Brexit deal at the end of negotiations.
The latest sign of progress has been the suggestion of extending the transitional period, to ensure that the UK is fully prepared for life outside the EU.
The idea of keeping the UK in the EU for longer hasn’t gone down well among pro-Brexit MPs, but is still seen as something that could ensure a good Brexit deal by the end of the transition.
Today’s negative Brexit news has dragged the GBP/CNY exchange rate lower; analysts are warning that UK businesses urgently need clarification on post-Brexit conditions.
Highlighting growing uncertainty among UK business owners, British Chambers of Commerce (BCC) Director-General Adam Marshall has said:
‘Firms have been dealing with uncertainty over the future relationship with the EU since the referendum vote over two years ago.
‘As we get closer to the crunch, the lack of precision is starting to have a material impact on their decision-making.’
Pound to Chinese Yuan Exchange Rate Forecast: Are GBP/CNY Losses ahead on CBI Stats?
The Pound (GBP) could turn volatile against the Chinese Yuan (CNY) on Tuesday next week, when key Confederation of British Industry (CBI) data will come out.
The CBI is expected to report a lower level of business optimism alongside a still-negative reading for levels of industrial orders – such results could weaken the Pound and cause GBP/CNY losses.
The next Chinese data isn’t due until 31 October, when news of manufacturing sector growth might cause CNY/GBP exchange rate gains.