Pound Sterling (GBP) Exchange Rate Forecast to Tick Higher against the Chinese Yuan on Unjustified Sterling Losses
The Pound Sterling to Chinese Yuan (GBP/CNY) exchange rate edged higher by around 0.2% on Thursday morning.
On Wednesday the British asset dived against its major peers after labour market data produced less-than-ideal results. Of particular disappointment was the second monthly rise in unemployment, although the headline unemployment figure held at 5.6%. However, Thursday has seen the British asset recover losses amid speculation that the downtrend was unjustifiably sharp. Given that the data showed wage growth continues to accelerate and with a backdrop of improved production, the British economy is still on course for significant improvement.
Also aiding the Sterling appreciation was the RICS House Price Balance which came in at 44% in July; bettering the median market forecast 42%. ‘A renewed acceleration in house price inflation allied to a fairly flat trend in sales activity highlights the very real challenges being presented by the housing market,’ RICS chief economist Simon Rubinsohn said. ‘A coherent and coordinated house building strategy is required,’ RICS head of policy, Jeremy Blackburn, said.
The Pound Sterling to Chinese Yuan (GBP/CNY) exchange rate is currently trending in the region of 9.9886.
Chinese Yuan (CNY) Exchange Rate Forecast to Hold Losses against the Pound (GBP) despite PBoC Indicating an End to Devaluation
Over the past few days the Chinese Yuan tumbled across the board as the People’s Bank of China (PBoC) intervened in the currency market. The PBoC devalued the Yuan in the hope of combating the domestic economic slowdown and providing a much needed boost to exports. On Thursday, however, China’s central bank signalled support for the currency which has seen the asset stabilise against its major peers.
‘The PBoC has drawn a line in the sand and given verbal guidance to the market,’ said Eddie Cheung, a strategist at Standard Chartered Plc in Shanghai. ‘If there are distortions, such as a very large gap between the onshore and offshore rates, the central bank will come in and stabilize the market.’
The Pound Sterling to Chinese Yuan (GBP/CNY) exchange rate dropped to a low of 9.9658 today.
Pound Sterling to Chinese Yuan (GBP/CNY) Exchange Rate Forecast to Hold Gains ahead of Chinese Foreign Direct Investment
With an absence of further domestic data publications to provoke changes, the Pound Sterling to Chinese Yuan (GBP/CNY) exchange rate is likely to hold gains for the remainder of Thursday’s European session. With that being said, any news from the PBoC may caused Yuan volatility. During Thursday’s Australasian session China’s Foreign Direct Investment data, which has the potential to provoke changes for the GBP/CNY pairing, is due for publication. British Construction Output data is also likely to impact on the GBP/CNY exchange rate.
The Pound Sterling to Chinese Yuan (GBP/CNY) exchange rate reached a high of 10.0564 today.