16th July 2010 Pension Foreign Exchange Report QROPS & QNUPS
We continue our daily look at factors affecting currencies allowing some insight into market conditions affecting exchange rates. Cash and income timing for UK Pensions and QROPS should be considered to maximise the Pension, QROPS and investment income and benefits taken.
Investment market volatility and currency exchange remains a challenge. Things are still very volatile and we are in unique global influencing territory. In conjunction with investment returns, currency exchange continues to concern many expats with UK Pensions, QROPS and now QNUPS.
Thursday was a quiet day for the UK with no major data releases however this didn’t stop the pound moving to a two and a half month high against the dollar. This was largely caused by stronger than expected results from the US Investment Bank JP Morgan Chase. JP Morgan’s earnings per share in the second quarter came in at $1.09 compared with forecasts of $0.71.
Sterling hit highs of $1.5394 against the dollar before falling back.
Pimco, the world’s second largest bond house boosted the pound by reversing its opinion on UK gilts saying it does not expect the UK to fail in meeting its commitments. Pimco believe that exposure to the UK in the credit default swap (CDS) market offers a valuable opportunity. The common belief from analysts is the markets have over priced the risk of a UK sovereign default.
Against the euro the pound lost previous gains made and dropped below the €1.19 level. This was caused largely by euro strength after a successful Spanish 15 year government bond auction.
Soft inflation and manufacturing data caused concerns about the strength of the US economy, which caused the dollar to hit a two and a half month low against the euro and a basket of major currencies.
For a third straight month there was a decline in producer prices which came a day after the Federal Reserve minutes revealed they may need to boost the economy if the recovery slows any more. This caused the euro to hit a high of $1.2917, the first time since May. This is a 10 cent movement from the lows of EUR/USD $1.19 caused by the recent debt troubles of Greece and Spain.
Gerard Associates Ltd advises expats and people considering living abroad on the technical and currency options available for Pensions, QROPS, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pensions, investments, currency exchange and guidance on taxation in most popular ‘sunnier’ climates. This with the re-assurance and security of UK authorised and regulated advice – essential tools to avoid the offshore casino.