GBP/CNH: Offshore Yuan drops hits 3.5-year low despite US-China trade optimism
|- GBP/CNH has jumped to the highest level since the June 2016 Brexit referendum.
- Yuan is struggling despite the US-China trade optimism.
- GBP is flying high on exit poll forecast of Tory majority.
Offshore Yuan (CNH) has dropped to a 3.5-year low against the British Pound despite the talk of the US-China trade deal.
President Trump on Thursday tweeted that Washington was “very close” to a trade deal with Beijing. The news put a bid under the risk asset, lifting US stocks to fresh record highs.
Further, BBC reported two hours ago that Trump has signed off on the terms of the deal and could make an official announcement as soon as Friday.
Even so, the offshore Yuan is feeling the pull of gravity against the British Pound. The GBP/CNH pair is currently trading at 9.3830, a level last seen in June 2016.
The pound is flashing green on exit polls forecasting a big election victory for the incumbent Prime Minister Boris Johnson's victory.
Experts believe a decisive Tory victory will clear the way for Johnson to take Britain out of the European Union (EU) on Jan. 31 and the resulting clarity on the Brexit front will likely bode well for the economy.
The real results released so far are pointing to Tory party victory, as anticipated by exit polls.
As a result, the CNH may continue to trade in the red against the British Pound.
The offshore Yuan is also reporting losses against the greenback. The USD/CNH pair is currently trading at 6.9636, representing moderate gains on the day, having dropped by 1.24% on Thursday, the biggest daily decline since Aug. 13.
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