The Fluctuating Rate of the Pound Sterling to the Chinese Yuan: A Visual Representation

Introduction

The exchange rate between the pound sterling and the Chinese yuan has been subject to fluctuations over the years. This can be attributed to various factors, such as economic policies, political instability, and global events. This article aims to provide a visual representation of the exchange rate between the two currencies, highlighting significant changes and potential causes.

Historical Trends

Since the global financial crisis in 2008, the exchange rate between the pound sterling and the Chinese yuan has undergone significant changes. In 2014, the pound sterling reached a peak of 9.88 against the Chinese yuan, followed by a sharp decline in 2016, when it reached a low of 8.06. The rate continued to fluctuate, but it remained around eight yuan to a pound until the Brexit referendum in 2016. Following the Brexit vote, the pound sterling experienced a steep decline against the Chinese yuan, dropping to less than seven yuan in late 2016. This was due to a combination of factors, such as the uncertainty surrounding Brexit, the weakening of the British economy, and the strengthening of the Chinese economy. In 2018, the exchange rate stabilized, remaining around 8.5 to 9 yuan per pound.

Recent Developments

In 2020, the COVID-19 pandemic had a significant impact on the exchange rate between the pound sterling and the Chinese yuan. In March, the pound sterling experienced a sharp decline against the yuan, as the pandemic began to spread rapidly in the UK. The Bank of England responded by cutting interest rates and increasing quantitative easing to support the economy, which further weakened the pound sterling’s value. However, since April, the pound sterling has made a partial recovery against the yuan, as the UK has managed to bring the pandemic under control and successfully vaccinated a substantial proportion of its population. Furthermore, the UK’s trade agreement with the EU in December 2020 has also improved market confidence in the British economy, which has had a positive effect on the exchange rate.

Conclusion

Overall, the exchange rate between the pound sterling and the Chinese yuan has been subject to considerable fluctuations over the last decade. These fluctuations can be attributed to a range of economic and political factors, such as the global financial crisis, Brexit, and the COVID-19 pandemic. Despite this volatility, the exchange rate has remained relatively stable over recent years. The outlook for the future remains uncertain, given the ongoing impact of the pandemic, as well as the changing global economic landscape.