1. INTRODUCTION

Over the past few years, the pound’s performance against the yuan has been a hotly debated topic. With the COVID-19 pandemic wreaking havoc on global economies, the exchange rate of the British pound against the Chinese yuan has undergone significant fluctuations. In this article, we will analyze the current trend of the pound against the yuan and determine the factors influencing it.

2. CURRENT SITUATION

As of June 2021, one British pound is trading at approximately 9.11 Chinese yuan, which is a decline from the 2020 peak of 9.95 yuan. The pound has been on a steady decline against the yuan since mid-April 2021, partly due to continuing global challenges posed by the COVID-19 pandemic. The pandemic has caused job losses, and many businesses continue to suffer significant losses, resulting in reduced economic activity and a weaker exchange rate for the pound.

3. FACTORS INFLUENCING THE EXCHANGE RATE

Several factors contribute to the exchange rate of the pound against the yuan, and these include:

The COVID-19 pandemic: This is an ongoing global economic challenge, which has brought many businesses to their knees, leading to a significant decrease in the exchange rate of the pound against the yuan.

The strength of the two countries’ economies: The strength and stability of the British and Chinese economies significantly affect their currencies’ exchange rates.

Government policies: The policies of the two countries' governments, such as those relating to interest rates and inflation rates, could play a role in determining the exchange rate.

4. UPCOMING EVENTS

Several events may affect the exchange rate of the pound against the yuan, and these include:

Brexit trade deal: The continued negotiations surrounding Brexit may have a significant impact on the value of the pound against the yuan as the UK’s trade deals with other countries, including China, are renegotiated.

Monetary policy: Changes to the monetary policy of the British and Chinese governments, particularly in relation to interest rates, could cause fluctuations in the exchange rate.

COVID-19: The virus's continued impact on global economies and the implementation of policies to control its spread could influence the exchange rate.

5. FORECAST

Given the current economic conditions globally, it is challenging to make accurate predictions of future exchange rates. However, some analysts predict that the pound's value against the yuan may continue to decline in the short term because of the COVID-19 pandemic's ongoing economic effects. However, in the long term, a stabilization of the economies and the end of the pandemic could help the pound regain its lost value against the yuan.

6. CONCLUSION

In conclusion, the exchange rate between the pound and the yuan is currently experiencing a declining trend due to factors such as the COVID-19 pandemic's economic impact. However, the situation could improve in the long term, depending on various factors such as the success of the governments' policies and events such as Brexit. Investors and businesses must keep abreast of the changing financial landscape to make informed investment and business decisions.